Hard Credit Inquiry vs. Soft Credit Inquiry

What’s the difference between a hard credit inquiry and a soft credit inquiry? While a hard credit inquiry affects your credit score, a soft inquiry does not.

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Hard and soft credit inquiries are two ways your credit reports are accessed. For instance, while an application for a mortgage leads to a hard credit inquiry, checking your credit score through Equifax or TransUnion will result in a soft credit check. One key difference between the two is that hard inquiries impact your credit score, while soft inquiries don’t.

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MONEYGEEK’S TAKEAWAYS
  1. Hard credit inquiries affect your credit score, and soft inquiries don't.
  2. Minimize hard inquiries by spacing out applications for credit.
  3. Most lenders view six or more hard inquiries on your credit report in a negative light.
  4. Accessing your credit reports on your own doesn’t affect your credit score.
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What Is a Hard Inquiry?

A hard credit inquiry, hard credit check or hard pull are all different ways to refer to a lender accessing your credit report through any credit reporting agency such as Equifax, TransUnion or Experian. This type of credit check happens after you apply for credit of any kind, be it a credit card, personal loan, auto loan or mortgage. In most cases, you are required to provide permission before a lender initiates a hard inquiry.

When a lender requests a hard credit inquiry, they do so to determine your creditworthiness and the risk you pose as a borrower. While a creditor's decision to lend to you relies on your credit report, factors such as your credit utilization ratio and income also matter.

A hard credit check impacts your credit score to some degree, which is why it’s best to avoid initiating too many in quick succession.

Common Hard Inquiries

Hard credit pulls take place when:

  • You apply for a credit card, line of credit, student loan, personal loan, auto loan or mortgage
  • You request an increase in your credit limit (credit card or line of credit)
  • You apply for a new utility connection
  • You submit a rental application
  • A collection agency tries to find you through its skip-tracing process

Will Hard Inquiries Affect Your Credit Score?

Hard inquiries have a bearing on your credit score. However, the impact is more pronounced for people with few credit accounts for limited credit histories. The number of inquiries also plays a role in the significance of the effect.

FICO’s page on credit checks suggests that a single hard pull takes fewer than five points off the credit scores of most individuals.

If you have good to excellent creditworthiness, you likely don’t have to worry about the effect that a single hard credit check will have on your credit score. However, the same cannot be said for someone with poor, limited or no credit history. In such a case, more points will likely be docked from your credit score after a hard inquiry.

Too many hard inquiries on your credit report within a short span can be a red flag to prospective lenders. However, this is not true in cases of rate shopping. For example, if your search for a mortgage, a student loan or an auto loan has led to multiple hard inquiries and you apply for one within a 14-day window, all the pulls will be viewed as a single inquiry through the VantageScore and the older FICO scoring models. Under the revised FICO model, this extends to a 45-day window. Keep in mind that applying for credit cards doesn’t fall under the scope of the rate shopping exception.

How Long Will Hard Inquiries Last?

Hard inquiries stay on your credit reports for 24 months, but their effect on your credit score diminishes with time. For instance, many people can fix a marginal drop in their credit score after a hard inquiry within a few months by maintaining responsible financial habits.

Your FICO score only accounts for hard inquiries that have taken place in the preceding 12 months. You may expect even more leniency with your VantageScore, which tends to rebound within three to four months of a hard inquiry, so long as there is no further negative activity.

How Many Hard Inquiries Is Too Many?

Lenders have their own stipulations when it comes to the number of hard inquiries they find acceptable. If you reach that limit, your application for credit stands little chance of approval — no matter how good your credit score. Typically, most lenders deny an application for credit if they see six or more hard inquiries on a credit report.

You don’t have to worry about multiple hard inquiries showing up on your credit report when you’re rate shopping to get a new mortgage, refinance your existing mortgage, take out a car loan or apply for a student loan. What’s important is that you apply for the credit you’re seeking within the stipulated period of 15 or 45 days.

What Is a Soft Inquiry?

The primary difference between hard and soft credit checks is that soft checks don’t affect your credit score. A soft inquiry takes place when you or a business initiates the process of accessing your credit report in the absence of an application for credit.

Soft inquiries usually take place for background checks and preapproved financing. Unlike hard credit checks, they don’t require your consent.

Common Soft Inquiries

Common scenarios that lead to soft credit inquiries include:

  • Requesting a copy of your own credit report
  • Applying for insurance
  • Applying for a new job that requires a background check
  • Receiving offers of preapproved credit
  • Initiating a new contract with a utility company

Viewing Soft Inquiries on Your Credit Report

You can view soft inquiries on your credit reports. However, not all soft inquiries make it to all credit reporting agencies. For example, while you might see a particular soft inquiry in your credit report from Experian, it might be missing from your Equifax and TransUnion reports. Besides, soft credit inquiries don’t show up when lenders check your credit reports through hard pulls — they only appear on credit reports you personally request.

Soft Inquiries and Your Credit Score

Because soft inquiries take place for reasons unrelated to applying for credit, they don’t affect your credit score. So, whether it’s a probable employer pulling your credit report to run a background check or an existing credit card provider checking it to suggest suitable new cards, you don't have to worry about a soft credit check affecting your score.

How to Dispute Hard Inquiries

Going through your credit reports from time to time is important because, among other things, it gives you the ability to find hard inquiries that you don’t recognize. Finding these is important as such inquiries could be a sign of criminal activity.

Once you find a suspicious hard inquiry, use the information in your credit report to contact the lender in question. For all you know, the creditor might be associated with a business you received a store card or financed a purchase through, such as a car or a home appliance.

If, upon contacting the creditor, you still feel you might be a victim of fraud, contact the credit reporting agency and dispute the hard credit inquiry. You may also consider filing a complaint with the police and reporting the incident to the Federal Trade Commission.

Check Your Credit Report Regularly

Routinely checking your credit report gives you easy means to see how many hard inquiries you’ve had in the last two years. Doing so could mean spotting hard inquiries that might result from identity theft or fraudulent use of your information sooner rather than later.

Keep in mind that fraudulent use isn’t just limited to hard inquiries. If someone takes credit on your name and doesn’t repay it, it will reflect on your credit score. If you experience a sudden, unexplainable drop in your credit score, it could be a sign of identity theft or otherwise fraudulent activity.

How to Check Your Credit Score Without Lowering It

You are legally allowed to access your credit reports from each of the top three credit reporting agencies once every year for free. Doing this doesn’t lower your credit score. You may request your free credit reports through annualcreditreport.com — a website authorized by federal law — online, over the phone or via mail.

Alternatively, you can get your free credit reports directly through:

Minimizing the Effects of Hard Inquiries

The best way to minimize the effect of hard inquiries on your credit score is to wait adequate time between applications for credit, as multiple applications in quick succession might lower your credit score considerably. This is especially true when you apply for multiple credit cards or different types of credit in a short period.

If you plan to take out an auto loan or a mortgage, consider refraining from applying for any other type of credit in the next six months, as doing so can lower your credit score.

An exception to multiple hard inquiries reflecting poorly on your credit score is when shopping for a mortgage, auto loan, personal loan or student loan. Depending on the credit reporting model, all inquiries within a 15- or 45-day period are clumped together as a single inquiry. To play it safe and minimize the effect of hard inquiries on your credit scores across agencies, it’s best that you stick to the 15-day window.

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MONEYGEEK EXPERT TIP

Credit inquiries may seem scary, but don’t give them too much thought. As long as you are financially responsible, the ‘dings’ you receive to your credit score will smooth out quickly. — Brett Holzhauer, Credit Card Journalist

Other Questions You May Have About Credit Inquiries

Here are answers to some of the most commonly asked questions about soft and hard credit checks.

Next Steps

When it comes to soft vs. hard credit checks, it’s the latter you need to worry about. Ideally, you should leave as much time as possible between credit applications, so they have little impact on your credit score. Too many inquiries in quick succession don’t reflect well on your creditworthiness.

Be sure to go through your credit reports at least once each year to track how many hard inquiries appear. If you find any discrepancies, check their legitimacy and — if necessary — dispute them as soon as possible.

Learn More About Credit Scores

The MoneyGeek editorial team remains on top of the latest news and regulation changes surrounding credit scores and credit scoring models used by different credit reporting agencies. We understand the intricacies of how credit scores work, so our readers may use our expertise to their benefit.

About the Author


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Rajiv Baniwal has been writing about different financial topics for over 15 years. Meticulous in his research, he makes sure he provides accurate and up-to-date information. His areas of expertise include mortgages, personal loans, credit cards, insurance and international money transfers.


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