Hard Inquiry vs. Soft Inquiry: What’s the Difference?

What Is a Hard Credit Inquiry?

A hard inquiry, also called a hard pull or hard credit check, occurs when a creditor accesses your credit file to assess your creditworthiness and potentially approve you for a credit card, loan or line of credit. Depending on the lender and type of credit, they may view one, two or all three of your credit reports from the three major credit bureaus (Experian, TransUnion and Equifax).

The most common scenarios in which you can expect a hard inquiry include:

• Applying for a new credit card: Each credit card application will likely result in a hard inquiry.
• Purchasing or leasing a car: Whether you're applying for a loan from a bank or dealership to buy a car or you're leasing a car, you can expect a hard inquiry.
• Buying a house: When you apply for a mortgage, the lender will do a hard pull on your credit initially, then again shortly before closing.
• Applying for a personal loan: As with other lenders, personal loan lenders will do a hard credit pull when you formally apply for the loan.
• Applying for a private student loan: If you're applying for private student student loans, lenders will likely run a hard inquiry to evaluate your creditworthiness. The same is true if you apply for a federal direct PLUS loan, including parent PLUS loans.
• Requesting a credit line increase: If you ask your credit card issuer to increase your credit limit, it may run a hard inquiry to determine your eligibility.
• Renting or leasing an apartment: This could be a hard pull or soft pull; check with the landlord or leasing company to know for sure.

How Long Do Hard Inquiries Stay on Your Credit Report?

Hard inquiries remain on your credit report for up to two years, but as long as you keep up with your debt payments, credit scores often rebound from an inquiry within a few months. Also, most credit scoring models no longer count a hard inquiry in score calculations at all after 12 months.

According to FICO, one hard inquiry will typically reduce your score by fewer than five points. However, multiple hard inquiries in a short period of time may have a compounding negative effect.

The only exception is if you're rate shopping for a mortgage loan, auto loan or student loan. In this event, FICO will ignore rate-shopping inquiries fewer than 30 days old and count multiple inquiries as a single inquiry if they all occur within a certain period—45 days for new FICO scoring models and 14 days for older models.

What Is a Soft Credit Inquiry?

Soft inquiries appear on your credit report when someone runs a credit check for reasons unrelated to lending you money. A soft pull or soft credit check can happen for several different reasons, including:

• Checking your own credit: Viewing your own credit report generates a soft inquiry.
• Loan prequalification: Some lenders may do a soft pull when you are seeking loan prequalification—and in some cases, preapproval—as part of the rate-shopping process.
• Promotional offers: A company may pull your credit to see if you qualify for a promotional offer. These are also called pre-screened offers.
• Employment background checks: Employers may perform soft inquiries as part of their pre-employment screening process.
• Requesting utilities: When you apply to set up a service at a new address, the utility companies might check your credit to determine whether you need to make a deposit.
• Renting or leasing an apartment: This could be a hard pull or soft pull; check with the landlord or leasing company to know for sure.
• Buying insurance: In most states, auto and homeowners insurance companies run a soft credit check to calculate your credit-based insurance score, which may influence your premium.
• Account servicing: Some credit card companies may occasionally run soft credit checks on existing customers to evaluate whether to adjust their account terms, such as a credit limit increase or decrease, or to see if you qualify for a promotional offer.

How Long Do Soft Inquiries Stay on Your Credit Report?

Like hard inquiries, soft inquiries remain on your credit reports for two years. However, because they're not related to an application for credit or a loan decision, they aren't associated with greater repayment risk and, therefore, have no effect on your credit score.

How to Minimize Credit Inquiries

While a hard inquiry will rarely, if ever, be the sole reason you're denied credit, it's still important to be mindful of the number of hard inquiries that appear on your credit report. On the flip side, soft inquiries have no impact on your credit, so it's best to prioritize soft pulls when possible.

In particular, here are some ways to avoid too many hard inquiries:

• Get prequalified. Take advantage of prequalification offers before formally applying for credit. Prequalification typically involves a soft credit inquiry and provides an idea of your eligibility—and possibly even a rate quote—without affecting your credit score.
• Use the rate-shopping window. When shopping for a mortgage, auto loan or private student loan, research and apply within a specific timeframe (inside a two-week period if at all possible). This will ensure that the multiple inquiries are treated as a single inquiry, minimizing the impact on your credit score.
• Limit new credit card applications. Because credit cards are opened upon approval, applying for multiple credit cards in a short period isn't considered rate shopping. As a result, each hard inquiry will be counted separately. If you plan to apply for multiple credit cards, consider spacing out your applications by six months or more.
• Avoid unnecessary credit. Before you apply for credit of any kind, carefully evaluate your financial situation, needs and goals to determine if it's the right decision. Also, consider other ways you can accomplish your objective, such as saving up instead.
• Monitor your credit. Regularly review your credit reports to ensure accuracy and identify any unauthorized inquiries or potential fraud. You can get free credit monitoring from Experian and receive alerts anytime there are changes to your Experian credit report.

Can You Remove Hard Inquiries?

You can't remove legitimate hard inquiries from your credit reports. However, if you review your credit reports and find a hard pull you don't recognize, it could be a red flag.

More specifically, it could be an indicator that someone has attempted to open a credit account in your name without your knowledge or authorization. So, if you find a hard inquiry you're unsure about, check for new fraudulent accounts.

Whether or not there's a new account associated with the inquiry, here are some steps you can take to address the issue.

• Contact the creditor. Reach out to the creditor in question using the contact information included in your credit report. Suspicious inquiries aren't always connected to illegitimate activity. For example, an unfamiliar creditor may turn out to be the lending partner of a retailer where you applied for a credit card or a dealership where you applied for an auto loan.
• File a dispute. You have the right to dispute inaccurate credit report information with the credit bureaus. You can file a dispute directly with each credit reporting agency to get the hard inquiry removed.
• Protect your credit reports. You have the right to add a fraud alert or security freeze to your credit reports, making it harder for identity thieves to commit further fraud using your information.

Monitor Your Credit to Support Your Financial Health

Your credit report is a living document that's constantly changing. Whether you're working to build your credit score or simply to maintain the progress you've already made, it's important to check your credit regularly.

With Experian's free credit monitoring service, you'll get access to your FICO^® Score^☉ and Experian credit report, making it easy to track your progress and get insights about your credit health. You'll also get real-time alerts when changes are made to your credit report, allowing you to respond quickly to potential threats.