How To Know If It's A Hard Or Soft Credit Inquiry

In the world of credit, you want to make sure you’re on top of your credit score. In the process, you'll hear the terms “hard inquiry” and “soft inquiry”. If you don't know the difference, read on.

Credit bureaus, such as Experian, differentiate credit checks into hard inquiries and soft inquiries, also known as hard pulls and soft pulls. Hard pulls most often will lower your score by a few points (unless it's considered “rate shopping") whereas soft pulls will not lower your credit score.

Hard Inquiries

Hard inquiries or hard pulls are when a lender checks your credit report when making a lending decision. These inquiries cannot be made by lenders without your consent.

Most times a hard pull will negatively impact your credit score by a few points. Examples of hard pulls include applying for an:

  • Auto loan
  • Student loan
  • Business loan
  • Personal loan
  • Credit Card
  • Mortgage

Sometimes applying to rent an apartment or requesting a credit limit increase results in a hard inquiry. There is an exception for what is called “rate shopping” but that generally only applies for mortgages and auto loans.

When you are trying to get the best rate on an auto loan or mortgage, you may make multiple inquiries. Fortunately, each inquiry doesn't cumulate to hurt your score. The most popular credit score, FICO, can recognize when you are shopping for the best rate and counts it as only one inquiry within a 45-day window. That means your credit score will take a hit, but only slightly.

Soft Pulls

Soft inquiries or soft pulls don’t negatively impact your credit score. These inquiries, unlike a hard pull, can be made without your permission.

Depending on the credit bureau, these soft inquiries can show up on your credit report, but they will not affect your credit score like a hard pull.

Examples of soft pulls include:

  • Checking your own credit score
  • Pre-approved credit card and loan offers
  • Background check, such as those done by employers
  • Applying to rent an apartment
  • Verification of identity by a financial institution, such as a credit union or stock brokerage
  • Renting a car

There’s a myth that checking your own credit score using a service like Credit Karma or Quizzle will negatively impact it. The truth is: it will not, because these are simply just soft pulls.

About the Author

Aren Dalloul is an investment banking analyst who interned at Self Lender.

Written on May 19, 2015

Self Lender is a venture-backed startup that helps people build credit and savings. Comments? Questions? Send us a note at hello@selflender.com.

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