Difference Between Soft Credit Check and Hard Credit Check

Published 9/18/07 (Modified 3/9/11)
By MoneyBlueBook

When you give out permission for others to make an inquiry on your credit report, did you know that the inquiry itself may have a negative impact on your credit score? Not all inquiries are created equal. An inquiry occurs when someone examines your credit history and credit score. While a hard inquiry will hurt your credit score, a soft inquiry will not.

Soft Credit Inquiry v. Hard Credit Inquiry

A soft pull describes an inquiry that does not affect your credit score. Soft pulls, or soft credit checks, frequently occur and oftentimes you may not even be aware of it happening. Each soft pull is noted on your credit history file but they are only for you to see and are not available for lenders to view. Examples of soft credit pulls include:

1. Credit report and score checks that you request yourself.
2. Initial credit checks by credit card companies that want to solicit you for a pre-approved credit card.
3. Initial credit checks by mortgage companies to pre-approve you for a loan.
4. Credit background checks by a potential employer.
5. Periodic credit checks by your insurance or credit card company to keep tabs on you.

A hard pull, or hard credit inquiry, is very different and does negatively affect your credit score. When you give permission for a lender to check your credit history for the purpose of extending credit to you, the lender will make what is known as a hard credit check. A hard credit check is almost always voluntary and is noted on your credit history file by all three credit bureaus for other lenders to see. Hard pull inquiries stay on your credit report for 1-2 years and each hard inquiry can cause a 5 point drop in your credit score for about six months. Examples of hard credit pulls that will affect your credit score include:

1. Applications for a new credit card.
2. Requests to activate a pre-approved credit card offer. Upon your request to activate the pre-approved card, the lender will take a much deeper look into your history and hit you with a hard pull inquiry.
3. Activations of new cell phone contracts.
4. Opening a new bank checking or savings account at some institutions. Many banks and credit unions will do a hard credit pull now when you open a new account with them.

How Do Soft and Hard Pulls Show Up On Your Credit Report

The three credit bureaus, TransUnion, Experian, and Equifax have different names for soft and hard credit pulls, but they operate in the same way. Soft credit pulls are recorded on your credit history file but have no effect on your credit score and are only available for you to see. Hard credit pulls on the other hand will negatively hurt your score and each hard inquiry can be viewed by lenders looking to extend you credit.

Rules of Thumb

You will never hurt your credit score by requesting your own credit history file. But whenever a lender is preparing to extend you credit, they will likely run a hard credit check. Because each hard credit pull hurts your credit score, it is best to keep them to a minimum. Too many hard inquiries will signal to potential lenders that you've been seeking loans and lenders may consider you a poor credit risk. If you're not sure, always ask the bank or lender what type of credit inquiry they will be making on your credit report - whether it will be a soft pull or a hard pull inquiry.