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Soft pull vs. hard pull: How each inquiry affects your credit
Hard Inquiry
1. A hard inquiry, sometimes called a hard pull or hard credit check, is an inquiry into your credit history and creditworthiness. Before a lender issues you a new line of credit, for example, it performs a hard credit inquiry to determine whether you are managing your existing credit accounts responsibly.
2. If a hard credit inquiry reveals that you have poor credit, you might not qualify for the credit card, loan or apartment you’re applying for. If a hard credit check reveals that you have excellent credit, you might receive a lower interest rate on your new credit account.
3. A hard inquiry can lower your credit score by a few points, though not all hard credit inquiries lower your credit score.
Soft Inquiry
1. A soft inquiry, sometimes called a soft pull or soft credit check, allows lenders, employers and other interested parties to review your credit—but these inquiries are not associated with lending decisions.
2. Insurance companies use soft credit checks to provide accurate quotes, credit monitoring services use soft pulls to track signs of identity theft and credit issuers do soft inquiries before issuing pre-approval offers. A soft credit inquiry might even factor into whether you get your next job.
3. A soft inquiry does not affect your credit score in any way.
Common Hard Inquiries
- Credit applications, including credit card, loan and mortgage applications
- Credit limit increase requests
- Rental applications
- Some types of utility applications
Common Soft Inquiries
- Credit pre-approval offers
- Credit monitoring services
- Insurance quotes
- Employer credit checks
How Hard Inquiries Impact Your Credit Score
“Hard inquiries may, but do not always, impact your credit scores,” Ulzheimer said, noting that one of the most common misconceptions about credit inquiries is that they always have a negative effect on your credit score. If a hard credit inquiry does negatively impact your credit score, it is likely to drop by no more than 10 points—and the damage should last no longer than a year. Hard inquiries automatically fall off your credit report after two years.
“The impact, if any, will last 12 months,” Ulzheimer advises. “Once an inquiry becomes older than 12 months, they are not seen by either FICO or VantageScore’s credit scoring models.”
How Soft Inquiries Impact Your Credit Score
Soft credit inquiries have no impact on your credit score. Though soft inquiries might appear on a special section of your credit report, they are not recorded by either FICO or VantageScore, which means they cannot affect your credit score.
The reason soft inquiries are not tracked by FICO or VantageScore is because soft inquiries are not directly related to a credit application. A lender might conduct a soft credit inquiry as part of a credit pre-approval, but that’s not the same thing as completing the credit application process. If you decide to apply for a credit card after receiving a pre-approval offer, the lender will do a hard credit pull before deciding whether to formally accept you for the card.
There are four factors to consider
Your credit score, your monthly loan payment, your property value and your debt-to-income ratio (DTI).
Bottom Line
Hard and soft credit inquiries are standard parts of an ordinary financial life.
Although hard credit inquiries can lower your credit score, the impact is relatively small and should drop off your credit report after two years.
Soft credit inquiries have no impact on your credit—you conduct your own soft credit inquiry every time you review your credit report.
If you practice responsible credit habits like making on-time payments and maintaining low balances, the occasional hard credit inquiry should have very little effect on your overall credit score.
