Soft vs. Hard Credit Check: How They Affect Credit Scores

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Not all credit checks were created equal. In fact, credit checks come in two forms: a soft inquiry and a hard inquiry.

There are three main differences between the two types of inquiries:

  • Whether or not your authorization is needed for the inquiry
  • The depth of information provided by the inquiry
  • How your credit score is affected by the inquiry

It’s important to understand how both forms of credit checks can impact your financial health.

Have a specific question in mind? Use the links below to jump straight to the answer or keep reading for a full overview:

What Is a Soft Credit Check?

A soft credit check, or soft inquiry, occurs when a person, lender, or organization checks your credit as part of a background check. This is the most routine type of credit check, and may happen for multiple reasons:

  • You check your own credit score online
  • An employer views your credit score as part of a background check
  • A credit card company pre-approves you for a card
  • You open an insurance policy, such as renters, car, or life insurance

A soft credit check delivers a high-level summary of your credit report – not your credit score. Your various lines of credit, loans, and payment history are all visible during a soft inquiry. This is helpful for lenders or companies to get a general overview of your financial responsibility if they want to extend an offer to you.

Unlike hard inquiries, the number of soft inquiries you receive are only visible to you when you check your credit report. Except for insurance companies, no other entity can see how many soft inquiries have been made on your account.

Does a Soft Inquiry Affect Your Credit Score?

Soft inquiries do not affect your credit score. Regularly checking your credit score, and therefore making a soft inquiry, is actually a great way to stay on top of your financial health.


If you ignore your credit report, it’s much easier for fraud to go undetected. If you see an unfamiliar inquiry, it could mean your identity has been stolen and a thief has applied for a new line of credit in your name. You might consider checking your score every few months to ensure everything is as it should be.

What Is a Hard Credit Check?

A hard credit check, or hard inquiry, is more extensive than a soft inquiry. Whenever you apply for a loan or a new line of credit, a potential lender will look at your credit report from one of the three official credit bureaus to determine whether to offer you a loan or line of credit, such as a mortgage.

Common reasons for a hard inquiry include:

  • You’ve applied for a new credit card and they’re checking your credit history
  • You’ve signed up for a new cell phone plan
  • You’re applying for a personal or business loan such as a mortgage, car loan, etc.
  • You’ve requested an increase to one of your current lines of credit

A hard inquiry requires you to authorize a lender or company to make the credit check because it delivers a more detailed report. Your full credit report, past hard inquiries, payment history, and public record information are all visible when a hard inquiry is made.

Does a Hard Inquiry Affect Your Credit Score?

A hard inquiry may lower your credit score anywhere from zero to five points, depending on your credit history. Points lost are determined by the existing number of inquiries you have on your report, the type of loan you’re applying for, and how long your credit history has been established.

Typically, a hard inquiry stays on your credit report for two years—but your score should bounce back to normal in about a year. And while a few points shaved off here and there might not seem like a big deal, multiple hard inquiries at the same time can lower your score enough where prime interest rates or other desirable offers may not be available to you.


Why? If a lender sees you’ve recently tried to open several lines of credit, it could signal that you’re in financial distress. While cultivating a healthy debt-to-credit ratio is a great way to maintain an excellent credit score, applying for too much credit in a short amount of time may flag you as a risk to lenders.

Does Rate Shopping for a Loan Affect Your Credit Score?

When it comes time to apply for a mortgage or car loan, credit bureaus understand that you’ll probably shop around for the best rates. When you get multiple hard inquiries for a specific type of product, it’s only counted as a single inquiry on your report. In the eyes of the credit bureaus, weighing your options when it comes to a major financial decision signals responsible spending habits.

A good rule of thumb for rate shopping is to send in all your applications within the span of 30 days. If you spread them out, your credit score could reflect multiple hard inquiries instead of lumping them together—which could wreak some major havoc.

Turbo uses your VantageScore through TransUnion in lieu of your FICO score to determine your financial health. VantageScore is unique in that it doesn’t limit rate shopping to standard lines of credit such as a mortgage, car loan, or student loan. Whether you’re applying for multiple credit cards or looking around for personal loans, all hard inquiries made within a 14-day window will be counted as one.

Can You Avoid a Hard Inquiry?

Unfortunately, you probably can’t avoid hard inquiries completely, as your credit score may take a few small hits here and there throughout your move up the financial ladder. If you’re teetering on the cusp of dropping from an excellent rating to a good rating, these tips may help you minimize the damage:

  1. Don’t apply for credit cards you know won’t approve you.

Do your research before applying for new cards so you can have a better understanding of which cards cater to borrowers with a similar credit history to yours.

  1. Check your credit score frequently.

If you’re diligent, you’ll be able to catch any fraudulent hard inquiries that could negatively affect your score, and then you could resolve it with the credit bureaus.

  1. Do all your rate shopping in a short period of time.

While there’s no way to prevent a hard inquiry during this process, you can limit the hits your score takes by going through application process in an efficient manner.

  1. If you aren’t rate shopping, apply for all other loans sporadically.

No matter how tempting it may be to rack up the amount of rewards you get from multiple credit cards, it could cost you more than it’s worth.

  1. Focus on improving the other aspects of your credit score.

While a hard inquiry could make a significant difference, it’s more likely that an unstable payment history or excessively high debt utilization would bring your score down. Practice good financial sense whenever handling new lines of credit and make sure you know how and when to repay any amount you owe.

What Should You Do if There’s an Incorrect Inquiry?

If you see a hard inquiry on your credit report that shouldn’t be there, it’s important to take action immediately. Get a hold of your free annual credit report and determine which bureau is reporting the mistake. Contact them and include a copy of your report. The bureau then has 30 days to look into the inquiry and determine whether to remove it.


Do Credit Inquiries Affect Your Business Credit?

If you own a business, inquiries on your personal credit do not impact your business credit score. Unlike a personal score, almost anyone can pull a business’ commercial credit for examination. Because it’s so easy to obtain this information, inquires won’t knock your score.

However, there are several different business credit bureaus that produce their own criteria for scores. Some scores, such as Equifax or PAYDEX, don’t take inquiries into consideration. Experian Intelliscore or FICO SBCS do look at inquiries, so it’s possible that funding could be affected by too many credit checks.

At the end of the day, practicing smart money management and strategically applying for credit lines may help protect your score. While the prospect of a hard inquiry might seem intimidating, try to think of it as a routine part of building your financial health.


Written by Mint

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