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Hard Credit Inquiries vs. Soft Credit Inquiries

Hard Credit Inquiries vs Soft Credit Inquiries Icon

A credit inquiry happens any time potential employers, lenders, yourself or other entities check your credit report. Let’s dig deeper to learn more about hard credit inquiries vs soft credit inquiries and how they can affect your credit score.

There’s a common misunderstanding that any time a lender reviews your credit report, your credit score will take a hit. Lucky for you, this isn’t the case.

While a hard credit inquiry (when you apply for a new loan) does impact your credit score, a soft inquiry (when a lender or other third party reviews your credit score for a purpose other than applying for credit) won’t affect your credit score at all.

What is a hard credit inquiry?

A hard credit inquiry (also referred to as a hard credit check or hard pull) happens when you apply for a new credit product such as a credit card or loan. When you apply for credit (aka loan), lenders will review your credit report to determine the risk of lending money to you. Rental and utility applications can also lead to hard credit inquiries.

When a lender reviews your credit as a part of your application, this counts as a hard pull. You will encounter hard credit inquiries when you apply for credit cards, auto loans, mortgages and other types of lending products. A hard inquiry will lower your credit score, generally by a few points, but is necessary to get a loan.

What is a soft credit inquiry?

There are two different types of soft credit inquiries: requests from yourself or from an outside party. A soft inquiry (also known as a soft credit check or soft pull) happens in a few different scenarios. A primary example of this is when you review your own credit report. You are entitled to order one free copy of your credit report from each of the three main national credit bureaus (Experian, Equifax and TransUnion) once a year from Learn more information on how to check your credit score.

Even if you want to review your credit report more than once a year, it won’t hurt your credit score. Reviewing your credit report regularly is a good habit to adopt as you can keep an eye out for any mistakes you need to fix or for early signs of identity theft. A soft credit inquiry can also occur when you apply for preapproval with a lender, you get a quote from an insurance company or when an employer checks your credit as part of their job application process.

Pro Tip: When you get credit card offers in the mail unsolicited, that credit card issuer likely performed a soft credit inquiry to see if you qualify for the credit card they want you to officially apply for.

Examples of hard and soft credit inquiries.

To better understand when you may encounter a hard or soft credit inquiry, check out a few examples of when you’ll be subject to a hard credit inquiry or soft credit inquiry.

Common hard credit inquiries:

  • Credit applications (credit card, personal loan, auto loan, mortgage loan, etc.)
  • Rental applications
  • Some utility applications
  • Credit limit increase requests

Common soft credit inquiries:

  • Applying for a new job that requires a background check
  • Receiving offers of preapproved credit (aka loans)
  • Insurance quotes
  • Credit monitoring services

How hard and soft inquiries affect your credit score.

Unfortunately, hard inquiries do lower your credit score because the credit bureaus interpret new credit applications as a sign that you’re going to take on more debt soon. On the bright side, the hit your credit score will take isn’t a massive one — credit inquiries only account for 10 percent of your overall credit score. Generally, credit scores drop by five to 10 points after a single hard inquiry. Your credit score can bounce back from this drop reasonably quickly, but the inquiry will stay on your report for two years.

Remember, a soft inquiry won’t affect your credit score at all.

How to minimize the impact of hard credit inquiries?

We can’t always avoid hard inquiries, but we can minimize the impact they have on our credit scores. When you apply for a new credit card, each application will result in a hard inquiry. That’s why it’s a good idea to know what card you want and how likely you are to be approved before you apply, and to space out card applications by at least six months.

Bottom line.

Hard inquiries can temporarily hurt your credit score, but there’s no need to fear soft inquiries because they won’t impact your credit score at all. There will be times when you can’t avoid a hard inquiry — and that’s OK. They eventually drop off your report and while you wait, you can practice other good credit habits (such as making on-time payments) to keep your credit score as healthy as possible. Learn more about improving your credit score here.

Until next time,

Alltru Credit Union Employee, Chelsea Springli's Signature

Chelsea Springli