Hard vs. Soft Inquiries: How They Affect Your Credit Score
When it comes to your credit score, understanding the difference between hard and soft inquiries will give you more control over your finances. Learn the key differences between hard and soft inquiries, how they affect your credit score, when they are used, and tips to manage them responsibly.
What is a Credit Inquiry?
A credit inquiry, also known as a credit check, occurs when a lender, creditor, or other institution reviews your credit report. This information helps them assess your creditworthiness before making decisions on loans, credit cards, or other financial services. Creditworthiness is a measure of how likely you are to repay borrowed money on time, based on your credit history, income, and financial behavior.
What is a Soft Inquiry?
A soft inquiry (or soft pull) happens when your credit report is reviewed for informational purposes rather than an official lending decision.
Examples of soft inquiries include:
Checking your own credit score
Pre-approved credit card offers
Background checks for employment
Insurance rate quotes
Rental applications
Do Soft Inquiries Affect Your Credit Score?
No, soft inquiries do not impact your credit score and are only visible to you on your credit report.
What is a Hard Inquiry?
A hard inquiry (or hard pull) occurs when a lender or creditor reviews your credit report as part of the approval process for new credit.
Examples of hard inquiries include:
Applying for a mortgage
Getting approved for a car loan
Applying for a credit card
Requesting a personal or student loan
Renting an apartment
Applying for certain utility services
Requesting a credit limit increase
How Hard Inquiries Impact Your Credit Score:
Can lower your credit score by 5 to 10 points for each hard inquiry pulled.
Stays on your credit report for up to two years, but its effect lessens over time.
Why Do Hard Inquiries Matter?
While one or two hard inquiries have a minimal effect, multiple hard pulls within a short period can signal to lenders that you're a higher-risk borrower, or an individual or entity that lenders perceive as having a greater likelihood of defaulting on a loan. This could make it harder to get approved for future loans or credit cards.
How to Manage Credit Inquiries Wisely:
✅ Limit Unnecessary Applications: Only apply for credit when needed.
✅ Rate Shop Within a Short Timeframe: Credit scoring models group multiple inquiries for mortgages or auto loans as one inquiry if done within 14-45 days.
✅ Monitor Your Credit Report: Regularly check your credit report for unauthorized hard inquiries.
✅ Consider Pre-Approval Options: Many lenders offer pre-qualification with only a soft inquiry.
You can check your credit report once a year for free at annualcreditreport.com.
Hard vs. Soft Inquiries
| Feature | Hard Inquiry | Soft Inquiry |
|---|---|---|
| Purpose | When a lender reviews your credit report to make a lending decision. (e.g., loan, credit card) | When you or someone authorized checks your credit for informational purposes. (e.g., pre-approval, background check) |
| Impact on Credit Score | May temporarily lower your credit score. | Does not affect your credit score. |
| Examples |
|
|
| Visibility on Credit Report | Visible to lenders and yourself. | May or may not be visible to lenders, always visible to yourself. |
| Duration on Credit Report | Typically stays on your credit report for two years. | Typically stays on your credit report for two years. |
The Bottom Line
Understanding the difference between hard and soft inquiries will help you know how to protect your credit score. While hard inquiries can temporarily lower your score, soft inquiries are harmless and often necessary for staying informed about your credit health.
If you're looking to build your credit responsibly, consider working with a trusted financial institution like Service One Credit Union. We offer many types of loans and other resources to help you reach your financial goals.
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