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What’s The Difference Between Soft And Hard Credit Inquiries?

Daniel Teo

Feb 01, 2020 4 min read

Update: Borrowell now offers weekly credit score updates! These updates aren't hard credit inquiries and don't impact your credit score. Sign up for free today to measure your credit health without harming it.

You may be wondering, “what’s the difference between soft and hard credit inquiries?” Well, it relates to your credit score. Your credit score is a complex number.

A large portion of your score depends on how often you make on-time payments and how much of your credit you use. Another smaller portion is determined by the number of credit checks on your credit report.

Not all credit inquiries are created equal and they impact your score in different ways. Do you know the difference between soft and hard credit inquiries? 

What is a soft credit inquiry?

A soft credit inquiry, sometimes referred to as a soft pull or soft check, typically happens when someone checks your credit report to gauge if you’ll be successful before applying for credit. A soft check could also be when you check your credit score yourself using Borrowell (it doesn’t affect your credit score). 

Soft credit inquiries, when done by a financial institution, only allow limited access to your credit report and they don’t affect your overall credit score – no matter how many times it’s checked.  

Soft credit checks can include:

  • Pre-approved offers (i.e. line of credit, mortgage)
  • Employer background check
  • Getting your credit score from Borrowell

Whether you’re about to apply for a loan or are looking to improve your credit health, checking your credit score on a regular basis can help with making informed decisions. With Borrowell, you can get your credit score for free and receive weekly updates.

Get your free credit score and free credit report from Borrowell! It only takes 3 minutes.

What is a hard credit inquiry? 

A hard credit inquiry, sometimes referred to as a hard pull or hard check, happens when a potential lender checks your credit report when making their lending decision.

Hard credit inquiries provide lenders full access to your entire credit history and will slightly lower your credit score. A record of the inquiry will stay on your credit report for two years, where it’s visible to other creditors when they make a hard pull.

Companies making hard credit inquiries require your permission before they make an inquiry and they can include:

Keeping hard credit inquiries to a minimum can be helpful if you’re preparing to take on a new financial commitment, such as applying for a mortgage

Hard credit inquiries and your credit score

While hard credit checks can cause your credit score to dip, there are a few things you can do to limit the impact and maintain a healthy credit score.

Consider spreading out applications that trigger hard credit inquiries to one every few months. This can allow your credit score time to recover from the impact of the inquiry. Multiple inquiries too close together suggest to potential lenders that you might be stretching yourself too thin and that you might have trouble paying them back.

That said, don’t let the fear of a few hard credit checks stop you from shopping around for the lowest interest rates when you’re buying a home or a car. Credit bureaus will combine hard pulls made within a grace period (sometimes, up to 45 days) for certain loan inquiries and count them as a single hard check.

Your credit report gives you full access to review anyone that makes a hard pull. If you notice an inquiry you don’t recognize, contact the credit bureau to dispute the record and have it removed. Updating the information they have on file can help generate a more accurate credit score.

What is the difference between soft and hard credit inquiries? 

Soft credit inquiries, like a free credit score check with Borrowell, provide some useful credit information and don’t lower your credit score. Hard credit inquiries, on the other hand, provide full access to your credit history when you apply for a loan and may lower your credit score.

You can limit the impact of a hard credit check by:

  • Spreading out loan applications to give your score time to recover
  • Working quickly when shopping around for the best mortgage or car loan rate
  • Reviewing your credit report and dispute hard pulls you didn’t authorize

The Bottom Line

Now that you know the difference between soft and hard credit inquiries, don’t stress out about avoiding all hard inquiries. Keeping hard inquiries in check can contribute to your financial well-being and improve the chances of qualifying for a loan with better rates when you need it. 

Get your free credit score and free credit report from Borrowell! It’s a soft inquiry that won’t affect your credit score.

About the Author 

Daniel Teo is a personal finance expert and travel writer for Urban Departures in Toronto. With a passion for financial literacy and a wanderlust that has brought him to over 30 countries, his stories reveal what can be achieved with good financial habits. Urban Departures has appeared in The Globe and Mail, the Toronto Star, CBC and on BNN. Connect with Daniel and Urban Departures on Instagram and Twitter.

Editor's note: This post was originally published in September 2019 and has been updated for accuracy and comprehensiveness.

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