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Key differences between a hard and soft credit check

Not all credit inquiries are created equal.

Justin Cupler

Contributing Writer at Tally

June 17, 2020

Credit seems to drive everything in today’s world. No longer is your credit score only important when borrowing money or applying for a credit card. 

Today, your credit score can also play a role in getting a new job, apartment, cell phone plan and or car insurance. That’s why it’s so important to be aware of your credit score and how your actions can affect it. 

Your credit score can be obtained through a credit inquiry, which is also called a credit check or credit pull. There are two types of credit inquiries: hard credit inquiries and soft credit inquiries.

Understanding the differences between these two types of credit checks and the impact they have on your credit can play a role in building a strong credit score. Below, we explore hard and soft credit checks, their differences and the impact they can have on your credit score. 

First, let’s look closer at what a credit inquiry is and when it matters. 

What is a credit inquiry?

A credit inquiry is when a company obtains your credit report for review. In most cases, the company is considering loaning you money or issuing you a credit card, but it can also occur when you’re being considered for a new job, shopping for car insurance or applying to rent a new apartment or house. 

Your credit report will show the company your past 7-10 years of credit history, including your payment history, credit limits, available balances, credit utilization and credit score. 

Your FICO credit score is made up of five main pieces of credit data: 

  • Payment history

  • Amounts owed

  • Length of credit history

  • Credit mix

  • New credit

Credit inquiries fall into the new credit section, which makes up 10% of your FICO credit score. Someone shopping for a lot of new credit presents a potential risk to lenders, so with each new credit inquiry, there is the potential your credit score could drop. This is why experts recommend limiting your  number of credit inquiries

That said, not all credit inquiries carry the same weight. There are two key types of inquiries, a soft inquiry and a hard inquiry, and they have significantly different impacts on your credit score. 

What is a hard inquiry?

A hard inquiry is when a company, organization, lender or credit card issuer pulls your credit following a loan or credit card application. The financial institution attaches this credit check to a loan or credit card application, showing your intent to take on new credit. 

Hard inquiries are often part of applications for:

Because a hard credit inquiry shows intent to take on new credit, having too many of them may negatively impact your credit score. One exception to this rule is when you’re rate shopping. Rate shopping is when you're actively seeking a loan for a specific purpose, like buying a car or home, so you submit multiple credit applications in a short period to find the lender offering the best loan terms. 

The rate shopping exception

When you’re rate shopping, many credit-scoring models combine these multiple inquiries into one to lessen the impact on your credit score. 

FICO, for example, will treat any number of related hard inquiries within a 45-day period as one inquiry. So, if you're shopping for a car and have your credit pulled by 10 different auto lenders within 45 days, FICO will count that as just one inquiry when calculating your credit score. 

How long does a hard inquiry stay on my credit report?

Hard inquiries remain on your credit report for about two years, but their impact lessens over time. FICO, for example, only considers hard inquiries from the past 12 months when calculating your credit score. 

A single inquiry likely won't have enough of an impact to lower your score. It generally takes many inquiries, like numerous credit card applications over a year’s time, before you’ll see a significant dip in your credit score. 

The effect each hard credit check has on your credit score varies based on your overall credit history. Typically, one hard inquiry  lowers your credit score by about five points, according to myFICO. 

Other financial indicators have a far greater impact on your credit score than inquiries, including: 

  • Payment history:

    Whether you make payments on time or not

  • Amount owed:

    The total amount of debt you owe across all loans, credit card balances, lines of credit, and other forms of borrowing

  • Credit utilization

  • Age of credit:

    How long you've had your current credit accounts on average

What is a soft inquiry?

A soft inquiry — also called a soft credit pull or soft credit check — allows a lender to see virtually the same information a hard credit inquiry would. However, since it’s not attached to a credit application, a soft inquiry has no impact on your credit score. 

Generally, a soft inquiry happens when a company pulls your credit for reasons other than lending money or they do so without express permission from you. 

Some common situations where a soft credit check may occur include: 

Using soft credit inquiries for prequalification

Consumers have become more aware of their credit scores and the impact inquiries have on them. This has led many lenders to use soft credit checks to entice prospective borrowers into applying for loan prequalification.

With a soft credit pull, a lender can tell you if you prequalify for a loan. The lender can also let you preview the loan terms, like the interest rate and payments, before adding a hard pull to your credit report. 

Keep in mind, though, these terms aren't official until you complete a loan application and the lender performs a hard inquiry. 

Ideally, a company will perform a soft credit check prequalification so you can make an educated decision before proceeding with a hard inquiry. 

Where can I see my soft credit inquiries?

You can see your soft credit inquiries by pulling your own credit through one of the major credit bureaus or by getting a free credit report each year via

The soft inquiries will be in a separate section of your credit report. Though they are visible, you can rest assured they have no impact on your credit score. 

Keep an eye on your soft credit checks because they can help you spot identity theft before it becomes an issue. If you see a lot of unfamiliar soft credit checks, you may want to investigate them. This could be a sign of attempted identity theft.

How to tell if it’s a hard or soft credit check?

In some cases, it’s clear whether a company is performing a hard credit check or a soft pull. Other times, companies place the authorization for a hard credit check deep in the terms of an agreement, making it easy to miss.

If you're concerned about the number of inquiries on your credit report and can’t find whether it’ll be a hard or soft credit check in the agreement, you can ask the representative you’re working with what type of inquiry it is before they do anything.

The type of inquiry is generally not a concern. A hard credit pull is not enough to do notable harm to your credit score, but it may be a concern if you're in the midst of a large credit-based purchase, like buying a home. 

When working on a large credit-based purchase, your potential lender may periodically check your credit and question changes, including inquiries, until your loan is finalized. If you’re in this situation and find out there will be a hard credit inquiry, note the date and reason for the inquiry for future reference.  

Apply with care and confidence

In the world of lending and credit scores, hard credit checks are attached to an application for credit and show a desire to take on new credit, and soft credit checks aren’t attached to an application.

One or two hard credit checks won’t have a significant impact on your credit score, and neither will soft credit checks. But avoid carelessly applying for loans and taking on too many hard credit inquiries in one year, as they can cause large drops in your credit score over time.