What's the Difference Between a Hard and Soft Credit Check

Summary
A credit check or inquiry is when a lender or creditor checks your credit report. Know the difference between hard and soft checks — and the consequences of each.
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Credit can be confusing even before you come across terms like "hard" and "soft" credit checks. So, here's a handy guide that breaks down hard vs soft credit checks, also known as inquiries or pulls, so you can feel comfortable with what these terms mean and make the right decisions for your finances.
What is a credit check?
A credit inquiry is a request to see your credit report. Credit scoring systems such as FICO or VantageScore® can consider whether you have applied for credit recently by looking at inquiries on your credit report. Sometimes, applying for several different credit cards in a short amount of time, for example, can have a negative effect on a credit score; however, not every inquiry has the same impact on your credit score. Inquiries fall into two categories: hard and soft.
What is a hard credit check?
When you apply for a loan, mortgage, credit card or other form of credit, you give lenders or credit card issuers permission to check your credit report. A hard credit check, also known as a hard credit inquiry or hard pull, happens when you submit a formal application for a loan or other credit product, and the lender checks your report as part of their decision-making process. Hard credit checks typically lower your credit score by a few points and can remain on your credit report for up to two years.
The negative impact on your credit score could add up if you have multiple hard inquiries on your credit report within a short time.1 However, FICO and VantageScore treat multiple hard credit checks for mortgage or auto loans as a single inquiry — called rate shopping — if they occur within a 14-45 day window, which minimizes the impact on your credit score.2
What is a soft credit check?
On the other hand, a soft credit check, also known as a soft credit inquiry or soft pull, does not affect your credit score. These checks happen when you or someone else looks at your credit report but not as part of a credit application. For example, a soft inquiry occurs when you check your own credit, when a company checks your credit to possibly prequalify you for an offer, or when an employer reviews your credit as part of a background check. Soft inquiries are only visible to you or anyone who has the ability to pull your credit report.
How hard and soft inquiries are used
Below are some common examples to give you a better idea of the differences between hard and soft inquiries. Note that credit applications trigger hard pulls, while prequalifications trigger soft pulls.
Hard credit inquiries
Personal loan applications
Auto loan applications
Credit card applications
Mortgage applications
Soft credit inquiries
Pre-employment background checks Lenders monitoring an existing account You, checking your own credit Prequalifying for a loan or credit card
Why do hard credit inquiries have a negative impact on credit?
Hard inquiries can negatively impact a credit score because they represent potential new debt not yet on a credit report.3 Multiple hard inquiries in a short time may signal a consumer having trouble paying their bills or at risk of overspending. Some lenders may view this as a potential risk.
However, your overall credit history, including whether you pay your bills on time and your overall debt obligations, are just as important. Although hard credit inquiries stay on your credit report for about two years, their significance decreases with time.4 So don’t worry. There are things you can do to potentially raise your score over time and improve your financial picture.
It’s also important to remember that there are lenders that, like OneMain Financial, look at more than your credit score alone. You just have to take time to find a lender that will take your entire financial situation into account and work with you.
How often should I review my credit report?
Errors in your credit report could impact your ability to get credit or a better interest rate. It’s a good idea to proactively check your credit report. Credit bureaus are required to provide you with a free copy of your credit report every 12 months upon request.5 They also provide credit monitoring services, sometimes for a fee. You can check with the bureaus for more information.
If you see a hard credit inquiry on your credit report that you didn’t initiate, contact the credit bureau, as it could be a sign of fraudulent activity. If you experience fraudulent activity, the resulting hard inquiry may be removed if you dispute it and the credit bureau accepts that dispute.6
Take charge of your credit
Now that you know the difference between these credit terms you’re better equipped to make smart money moves in the right direction. Understanding how soft and hard credit checks impact your credit puts you more in control of your credit and financial goals.
Sources:
1,2. https://www.experian.com/blogs/ask-experian/how-many-hard-inquiries-is-too-many/
3,4. https://www.experian.com/blogs/ask-experian/what-is-a-hard-inquiry/
6. https://consumer.ftc.gov/articles/free-credit-reports
6. https://www.bankrate.com/personal-finance/credit/hard-inquiry-removal/#what-is
*This article has been updated from previous postings from Nov. 2017-2021. Matt Diehl, Suzanne Wagner, Jessica Leshnoff, and Kim Gallagher have contributed to this article.
This article is for general education and informational purposes, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any purpose and is not intended to be and does not constitute financial, legal, tax, or any other advice. Parties (other than sponsored partners of OneMain Financial (OMF)) referenced in the article are not sponsors of, do not endorse, and are not otherwise affiliated with OMF.