Soft vs. Hard Credit Inquiries: What They Mean and Why They Matter

Learn the differences between soft and hard credit inquiries and how they impact your credit score. We debunk common myths about credit checks.
Written by:
Shannon Lee
Edited by:
Kristin Marino verified

Talking about credit inquiries tends to spark a lot of confusion. Does a credit inquiry mean that your credit score takes a hit? Does a credit check from one lender mean you can’t get credit elsewhere? What if you have more than one credit inquiry in a short time, like when shopping around for a loan or another financial product?

What’s the difference between hard credit inquiries and soft credit inquiries?

There are also some myths out there, such as checking your own credit report will damage your credit score. (Spoiler alert: It won’t affect your score at all.)

Let’s look at what to expect from credit inquiries and how they affect your credit score.

How Does a Credit Inquiry Work?

Two types of credit inquiries might show up on your credit report.

  • A soft credit inquiry doesn’t show up to creditors on your credit report and doesn’t affect your credit score. This is often the result of a prescreening for a credit card or other service.
  • A hard credit inquiry occurs when a personal loan company, credit card company, bank, or similar entity accesses your credit information. This usually happens when you apply for new credit.

Creditors who check your credit report can see the hard inquiries. They can’t see the soft inquiries, but you can see them when you get a copy of your credit report.

Each of the three credit reporting bureaus – Equifax, Experian, and TransUnion – are required by law to disclose to you who requested to see your credit report and if that access was granted.

Companies that provide financial matching services typically don’t need to perform a hard credit pull since they are only providing preapproved options. Instead, they rely on soft inquiries that don’t negatively impact your credit report.

Compare Hard and Soft Credit Inquiries

A hard credit inquiry usually occurs when you apply for a loan, credit card, or anything else that might affect your credit.

A soft credit inquiry often occurs if a credit card or loan company wants to offer their services to you. They will look at specific criteria to send you those “you are preapproved, apply now!” letters in the mail.

Here are some scenarios in which you might see a hard or soft credit hit on your report:

A single hard credit inquiry doesn’t affect your credit score that much.

Expect a change of five points or less, which will quickly go back up. A few factors determine how much it affects your ability to get a loan or credit card.

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How Do Hard Credit Inquiries Work?

Let’s say you are getting a mortgage. That hard credit inquiry is entirely expected, so credit card issuers and other entities you might have a loan through won’t take that particular credit inquiry into account when making decisions about your credit.

The same is true if you are looking for a loan. A good example of this is an auto loan. You might have hard credit hits from several banks as you seek out an auto loan, which might slightly impact your overall credit score. But again, as with getting a mortgage, most lenders will look at several hard credit inquiries as what they are – you are shopping around for a loan. This usually won’t prevent you from getting other credit.

However, if you are seeking several credit cards at the same time, you might be seen as a “credit risk,” and you might be denied a card or have your credit score take a more substantial hit.

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How Much Damage Does a Hard Inquiry Really Do?

Most FICO scoring models give you a 14-day to 45-day window for shopping around for loans and such. This means that if you had all those hard credit hits in that time frame, your credit score wouldn’t dip dramatically.

In addition, a history of credit inquiries has a minimal effect on your credit score. Keep these points in mind:

  • Your payment history matters most. That’s worth about 35% of your credit score.
  • The ratio of your outstanding credit card debt to your available balance is another 30% of your credit score.
  • The inquiries come into play in the “new credit” category in the report. However, that entire category makes up 10% of the score, and the inquiries make up only part of that 10%.

Credit inquiries impact your credit score for up to one year. However, the inquiries will stay on your credit report for two years.

How Is a Soft Credit Inquiry Different From a Hard Credit Inquiry?

A soft credit inquiry is often not initiated by you, but it might be. An example is a preapproval for a credit card or debt consolidation loan. If you simply want to check what your APR or interest rate will be, preapproval is a soft credit hit that allows the company to give you a ballpark figure based on the little they can see of your credit report.

The good news is that soft credit inquiries never affect your credit report. Other companies will never see them. These only appear on a consumer credit report, which you must initiate. You will see the soft inquiries when you get your annual credit reports.

Remember: Checking your own credit never hurts your credit score. You can and should check your credit reports often.

Can You Dispute a Credit Inquiry on Your Credit Report?

If someone made a soft credit inquiry, there is no point in disputing it. They didn’t receive any information that might have put your credit or credit score at risk, and only you can see the soft inquiry.

A hard inquiry is a different story. If the inquiry is legitimate, for instance, if you applied for a loan and gave them permission to check your credit, you usually can’t do anything to remove that inquiry. However, you can dispute the hard credit hit if you believe someone else is trying to take out a loan in your name. This is identity theft, which is something credit bureaus take very seriously.

What if you suspect fraud?

If it looks like someone tried to open credit in your name without your permission, immediately contact the credit reporting bureaus. Explain in writing what the problem is. If the credit bureau offers a dispute form, use it to ensure you have all the pertinent information they need. The credit bureau has 30 days to investigate the matter and tell you what changes they will make.

What if a creditor enters the wrong information?

If incorrect information has been entered—for instance, a mortgage company said you missed a payment when you didn’t—you can dispute it with the company itself and ask them to send a correction to the credit reporting bureaus.

You might also want to consider freezing your credit so only you can use it.

It’s crucial to monitor your credit

Keep in mind that sometimes, a credit inquiry ends up on one credit report but not another. That’s why checking all three credit bureaus’ reports is essential. You can do this through Annual Credit

Right now, you can check your credit reports for free once a week, but in the future, that might revert to the original option, which was being able to check your credit reports once per year.