What’s the Difference Between a Hard and a Soft Credit Check?

What’s the Difference Between a Hard and a Soft Credit Check?

What Is the Difference Between a Hard and a Soft Credit Check?
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There are two types of credit checks or inquiries that you should know about. Although not all credit inquiries affect your credit score, some do.
Credit inquiries help lenders to check whether you are a good candidate for a loan you are applying for, like a mortgage or car loan. They also help prospective employers to perform a background checks and help lenders to see whether they can offer you such pre-approved services as a pre-approved credit card or pre-approved insurance that you did not initially apply for.
A hard credit check is the kind of credit check that affects your credit score. Such checks are conducted when you apply for a loan, credit card, or anything else that requires a healthy credit score. The lender must obtain your consent in order to carry out a hard credit check.

Soft credit checks, such as those conducted by a prospective employer as part of a background check or by a lender wishing to offer you pre-approved services, are not as in-depth as a hard credit checks and do not affect your credit score.

What Is a Credit Inquiry?

A credit inquiry is a credit check that occurs when a company or person asks a credit bureau for your credit report. Since hard inquiries can affect your credit score but can only be conducted with your permission, it is a good idea to apply only occasionally for loans or anything else that requires a hard credit check. Credit inquiries can be conducted only by legitimate businesses and only for valid reasons. Members of the public cannot obtain access to your credit information simply by requesting it.

What Is a Hard Inquiry and When Is It Performed?

Whenever you apply for a loan, a credit card, or an increased line of credit—and sometimes when you apply to rent a property—you must give permission to the lender or landlord to conduct a hard credit check. (Although landlords will sometimes make only a soft credit inquiry instead.)
Hard inquiries generally lower your credit score by just a few points. But if too many are made in a short space of time, potential lenders viewing your credit report and seeing the number of hard credit inquiries will take this as evidence that you are already in need of money and that you are either currently in debt or have bad financial management skills. So it is a good idea to space out hard credit checks when possible instead of agreeing to many hard credit checks all at once.
Hard credit checks stay on your report for a little over two years. In the long run, then, their effects are on your credit score are minimal.
The most common reasons for hard inquiries include:

  • Student loan applications.
  • Rental property applications.
  • Personal loans.
  • Auto loans.
  • Mortgage applications.
  • Credit card applications and applications for credit limit increases.

When rate shopping—i.e., when applying to many different lenders in order to find the best rate for a loan—you may unnecessarily hurt your credit score if you agree to multiple hard credit checks within a short space of time. You can minimize the possibility by making multiple applications within a 14 day period, because credit scoring models that lenders use will likely group these all together as a single inquiry. We will further discuss how to minimize the effects of credit inquiries below.

What is a Soft Inquiry and When Is It Performed?

A soft credit inquiry does not affect your credit score. It won’t be added to your generally available credit report, so no one but you will be able to see it on your report.
Soft credit inquiries can be made all of the time without your knowing about them. But they can be made only by legitimate businesses with verified purposes, not by a member of the general public who has no valid reason for doing so. Soft credit inquiries generally happen when:

  • Companies check your eligibility for preapproved offers, such as credit cards and insurance offers that you did not initially apply for.
  • An employer wishes to conduct a background check.
  • You check your own credit score.

The report that people and organizations see after making a soft inquiry differs from what they see after making a hard inquiry. Credit reports generated by soft inquiries won’t show an employer any information that violates equal employment regulationssuch as race, nationality, gender, age, or religion, since screening employees based on any of these categories is regarded as discriminatory.
When insurance companies make a soft inquiry, they don’t get access to your credit score. They collect information from your credit report in order to build their own credit-based insurance score, which only resembles your FICO score without duplicating it.

How Does a Hard Inquiry Affect Your Credit Score?

Hard inquiries, such as those conducted when you apply for a new line of credit, can affect your FICO score. But whether and to what extent they do so depends on how many hard inquiries are made in a short amount of time as well as on your current credit score.
Multiple inquiries from lenders of auto loans, mortgages, and student loans are treated differently from other inquiries and may not affect your credit score, since these can be due to rate-shopping rather than to a serious desire to secure all of the loans being compared.
Inquiries made in response to applications for new lines of credit can have a greater impact on your credit score if you have a small number of accounts or a short credit history. In this context, a large number of inquiries may indicate that you are a greater risk than someone with no recent hard inquiries on his or her credit report.
In general, though, hard inquiries make up no more than 10% of your FICO score, and your FICO score includes inquiries from only the last 12 months. Although you can expect each hard credit check to remove about 3 to 5 points from your score, this number is negligible and easy to recover from. But keep in mind that lenders will pay attention to the total number of hard credit checks over the last two years of your credit history when deciding whether to lend to you.

How to Minimize the Effects of Credit Inquiries

Rate shopping to find the best loan and credit options normally involves agreeing to several hard credit inquiries in a short space of time.
You can limit the damage to your credit score in these instances by submitting all of your applications within a 14-day window; most credit-scoring models will recognize that your applications are for the same type of loan and will therefore group these together under one inquiry. But whether this is done depends on the credit-scoring model. The VintageScore 3.0 model, for example, does group inquiries made within a 14-day window under a single inquiry. Some of the newer FICO score models use a 45-day window.
Increase your chances of having multiple applications grouped under one inquiry by making applications of just one type within each window. If you need to make many mortgage applications and many auto loan applications, make them during separate windows so that you are obviously rate shopping and not applying for separate, unrelated loans.


People and organizations conduct credit checks on you all the time, sometimes without your knowledge. The ones that require your explicit consent, such as inquiries made when you apply for new lines of credit, are called hard credit checks, and these can hurt your FICO score. A large number of hard credit checks on your credit report can signal to lenders and others that you are a high-risk borrower, which is why it is so important to make applications involving a hard credit check only sporadically. When you are rate shopping—applying for a particular kind of loan or credit line from many different companies in order to find the best deal—make sure that you stick to a specific application window so that the multiple hard credit checks associated with these applications can be readily combined into a single inquiry.
On the other hand, soft credit checks—such as inquiries that consist of viewing your own credit score or of organizations checking your eligibility for an unsolicited offer—are visible only to you on your credit report. They do not affect your FICO score or your access to new lines of credit. These credit checks do not require your consent. But only legitimate businesses with verified purposes can conduct such a check.

Frequently Asked Questions

Can a credit search be conducted without my knowledge?

In order to screen you for preapproved insurance or credit-card offers that you have not applied for, legitimate businesses may conduct soft credit inquiries without your permission or knowledge.
Soft credit inquiries are visible only to you on your credit report, so you can see exactly who has been conducting soft credit checks on you. Other examples of credit checks that do not require your permission or knowledge include those initiated in connection with a court order or subpoena, or in connection with applications for child support and government benefits.

How many hard inquiries is too many?

Although one or two hard credit checks in the course of a year will have almost no effect, many recent hard credit checks can significantly harm your credit score. Not counting inquiries caused by rate shopping, six or more hard inquiries in a year can lower your FICO score and impair your ability to be approved for new lines of credit.

Can you remove hard inquiries?

Legitimate hard inquiries will disappear from your credit report after two years and generally cannot be easily removed. But if you notice a hard inquiry in your credit report that you did not authorize, you can file a dispute and have it removed. Contact the MoneyWizard team—the financial experts here to help you navigate the financial world—for more information on the dispute process so that we can help you look after your credit report and FICO score.

Your credit score can have a big impact on your financial future. Sign up for Experian to get your credit score and credit report for free! Join millions of other Americans and get the tools you need to help understand, manage, and master your credit—in under 3 minutes. Checking your credit score with Experian won’t hurt your score.


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