Posted by Income Taxes and Bookkeeping LLC

Hard Credit Checks vs. Soft Credit Checks: What's the Difference?

Hard Credit Checks vs. Soft Credit Checks: What's the Difference?

A hard credit application occurs when a lender checks your credit before approving a loan, such as a home or a car loan or credit card that you have applied for. A soft inquiry occurs when you receive an offer from a lender, such as a pre-approved credit card, or when you check your credit.

But do you know why hard credit queries happen instead of soft queries? And the differences between the two? What if an inquiry is hard or soft before it happens, or if there are repercussions for both? Find out all of this and more here.

What is the difference between soft and hard inquiries? 

Soft inquiries:

  • It does not affect your credit score

  • Made by lenders to offer pre-approved offers

  • This can be done without your consent. 

Hard inquiries

  • It affects your credit score

  • Made by lenders and creditors when applying for a loan or credit

  • You must give your written consent.

Impact on credit rating

Soft inquiries do not affect your credit score. Although small questions appear on your credit report, only you can see them.

On the other hand, hard inquiries will lower your credit score by a few points, although that shouldn't be a big deal. However, numerous hard inquiries in a short time can make creditors feel like you are a high-risk customer.

Your credit report contains hard queries for up to two years but typically affects your credit score for a year.

When the inquiry is used

Soft inquiries are always pulled on your credit, such as when you receive a credit card offer in your mail, when a potential employer checks your background, or when you check your credit.

While soft inquiries can arise without your knowledge, such as pre-approved credit card offers you receive in the mail, hard inquiries arise when you apply for a loan, credit card, or mortgage and have your lender check your credit history first before accepting or declining the loan.


When it comes to determining whether an inquiry will be hard or soft before it happens, you probably know when a hard inquiry will occur because you will need to agree with the lender.

For example, if you have ever leased or bought a car, you were required to sign a credit report permission form as part of the documents. By signing this document, you authorize the finance department of the representative office to go through your credit. In other words, you give them the green light to perform a hard credit inquiry on you.

While too much hard inquiry can make you look like you are a credit risk, rating agencies understand that more inquiries in a short period of time may be because you are "rate shopping." Agencies will group these inquiries, such as those from multiple mortgage lenders if you are home loan shopping, into one comprehensive hard inquiry on your report.

What to do before an inquiry 

If you are concerned about a possible hard inquiry and its effect on your credit score, there are several options available to you. First, before you apply for a large loan, like a car loan, mortgage, or even a student loan, ask the lender if a hard or soft inquiry is needed to secure the funds.

Also, keep credit requirements to a minimum. You don't want to destroy your credit score by asking for too many credit cards or other loans. Plus, too much credit can affect you financially.

You should also check the specific queries you made with those on your credit report to avoid credit card fraud. You can do this by getting a copy of your credit report.

Bottom Line

Although soft and hard credit inquiries are made to assess your credit status, hard inquiries can affect your credit score for a year and stay on your credit report for 24 months. Therefore, it is vital to understand the difference between soft and hard credit inquiry and when either is needed.



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