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Hard vs. Soft Credit Inquires: Knowing the Difference Matters

August 14, 2020 by Daniel Azzoli

Man checks credit report with laptop and papers on a desk.

Your credit score is an important indicator of your financial health for lenders, employers, and property managers so it’s vital to understand how different actions affect your overall credit history.

A FICO® credit score (named after the Fair Isaac Corporation who created the FICO scoring model) is commonly used to determine a person’s ability to pay debts in a responsible manner. A number of factors go into determining a credit score, including[1]:

  • Payment history
  • Amounts owed
  • Length of credit history
  • Credit mix
  • New credit

New credit, which makes up about 10% of your overall score, is typically made up of hard credit inquiries. When you or another entity looks into your credit history, it’s generally considered either a hard or a soft inquiry–but what’s the difference between hard vs. soft credit inquiries? Keep reading to learn more about how they differ and how they may affect your credit score.

What is a Hard Credit Inquiry?

Hard credit inquiries, commonly known as “hard pulls,” typically appear when an entity like a lender, an employer, or a credit card company is inquiring about your credit score. If you’ve applied for a mortgage, a car loan, or an apartment by signing a consent form, you may have hard credit inquiries on your credit report.

When it comes to hard vs. soft credit inquiries, hard inquiries can affect your credit by a certain number of points per inquiry. Keep in mind though that this depends on a variety of different factors. It is possible that one or two hard pulls may not dramatically affect your credit score, but if you’re not mindful about how you apply for loans or credit, they can take a toll.

Multiple hard inquiries for things like credit cards can signal to lenders that you may be a high-risk consumer, especially if inquiries occur in a short time frame. When you have numerous hard inquiries stacked up, it may affect your ability to get loans and is more likely to negatively affect your credit score. It’s wise to stay aware of your credit score and number of inquiries to prevent problems when applying for loans.

How Long Do Hard Inquiries Affect Credit Scores? 

This is a very common question. The good news is that they don’t last forever. In fact, they stop affecting your score after one year. The bad news is that they do stay on your credit report for 24 months[2].

person on their phone researching hard vs. soft credit inquiries

You can close accounts you’re no longer using, but unfortunately, that won’t make a hard credit inquiry disappear. One way to avoid the negative effects of hard pulls is to be more selective with when and how many times you apply for credit.

What is a Soft Inquiry on a Credit Report? 

Soft credit inquiries are commonly known as “soft pulls” and while they appear on your credit report, they do not affect your credit score. Typically, these are done when you don’t directly apply for a loan or consent (sign) to have a credit report pulled. If you’re wondering what information is on a soft credit report pull, it may include things like:

  • Times you have checked your own credit score
  • Background checks for employment or rentals
  • Lending you’ve been pre-qualified for

Like hard inquiries, soft inquiries remain on your credit report for 24 months.

If you’re confused about the difference between a hard vs. soft credit inquiry, you can check with your lender, credit bureau, or do some more research online.

Tips for Building Credit

Understanding the difference between hard vs. soft credit inquiries is one aspect of maintaining a good credit score, which can impact your ability to qualify for loans and more favorable interest rates.

FICO® credit scores can range from 300 to 850, with averages varying depending on age[3]. Typically, younger demographics (18 to 24 years old) have lower credit scores that those 55 and older. Any score over 740 is considered “very good,” while anything over 800 is excellent.

Building credit takes time, but by following a few simple tips for applying and obtaining credit, a person may be able to attain an excellent credit score that could help them in the future. Here are some valuable tips to build and maintain credit:

  • Know the timeline of when you’re making hard inquiries: Multiple hard pulls in a short amount of time could make you appear riskier to lenders/renters/employers.
  • Shop for loans wisely: Ask questions about loan terms, interest rates, credit limits, and penalties on credit cards and other liens. If something doesn’t seem right, avoid applying to incur fewer hard pulls on your credit report.
  • Check your credit report periodically: Check to make sure there aren’t any suspicious inquiries or errors that could be removed and are in the way of impacting your credit.
  • Communicate with lenders: Make sure you’re in touch with your lender and are aware of what type of inquiry that will appear on your credit report.
  • Report fraud: Regardless of whether something shows up as a hard or soft credit inquiry, if you’re not responsible for it, you need to report it to the major credit bureaus (Equifax, Experian, and TransUnion). This will protect you and may help protect others who have been targeted.

It’s important to follow these tips to give you some advantage when applying for loans, but also, an important key to remember is that you cannot remove legitimate hard or soft inquiries[4]. Only those that have been proven to be fraudulent can qualify for removal.







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