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Hard vs Soft Credit Check: What’s the Difference?

Whether you’re new to borrowing money, or you have borrowed before, you may know that the process often involves an inquiry into your credit. But not all credit checks are equal — some are considered soft and others hard.

What is the difference between these two types of credit checks, also called inquiries or pulls?

When any person or company pulls your credit, a record of the inquiry is kept on your credit report. The record lists the date of the inquiry, and the name of the inquiring party.

An individual soft credit check does not affect your credit report, but a hard credit check might. Here’s what you need to know.

cartoon of credit card with arrows

What is a soft credit check?

This occurs when a company or person looks at your credit report for a reason other than underwriting a loan. These may or may not happen with your permission.

For example, some lenders allow you to get an estimated rate for a loan before you complete a full loan application. This typically involves a short application that sends a soft pull to your credit report. Checking your own credit is also considered a soft pull. If you currently have a credit card, the issuer may also occasionally perform a soft pull for account maintenance, which could lead to your card’s credit limit changing.

These soft inquiries will not hurt your credit and are only visible to you when you review your credit report. If someone other than yourself looks at your credit report, they will only see the hard credit checks.

What is a hard credit check?

When you’re ready to complete a full application to borrow money — whether that’s for a credit card, student loan, mortgage, or personal loan — lenders typically make a hard pull on your credit as part of the underwriting process. This allows your credit report to be reviewed by the financial company.

Regardless of the result of your application, the inquiry remains on your report. If you make too many hard-pull inquiries in a short period of time, it can have a short-lived impact on your credit score. However, there are some exceptions to this rule if you’re shopping for rates or apartment hunting.

What kind of inquiry is being made on my credit?

Some lenders can give you estimated loan terms or pre-approval based on a soft pull, but require a hard pull if you want to proceed with the application. However, it can sometimes be difficult to determine if even a short application will result in a hard or soft inquiry. If you’re in doubt, contact the lender and ask.

At Earnest, our two-minute Rate Check is always a soft inquiry and never dings your credit. Checking your own credit is always a soft pull, while applying for a loan is often a hard pull. An application for an apartment, signing up with a new internet or cable service provider, or renting a car can lead to either type. Again, if you’re unsure, ask the provider before completing an application.

Do credit checks hurt your credit?

According to credit scoring agencies Fair Isaac Corporation (FICO) and VantageScore, which create the most widely used consumer credit scores, hard credit inquiries can have an impact on consumers’ credit scores—but it’s often only a small change and it’s not permanent.

Hard pulls can have the greatest impact on those with only a few credit accounts and the impact may increase the more inquiries you have. However, if you’re shopping to find the best rate for a loan or mortgage, VantageScore considers all inquiries made within a 14-day window as one inquiry when calculating your credit score. FICO considers multiple mortgage, auto, and student loan inquiries made within 14 to 45 days as one inquiry. This one inquiry could incur a small, temporary change on your credit. FICO scores also don’t take into account any mortgage, auto, or student loan inquiries made in the last 30 days.

While hard inquiries remain on your credit report for two years, they only impact your FICO credit score for up to one year. VantageScore states that a credit score will generally be back to its starting point within a few months of a hard inquiry.

How can I look at my credit report?

If you’re curious about your own credit report, you can get copies of your report through AnnualCreditReport.com, a site endorsed by the federal government to provide you with a free report every year. It’s a good idea to check your credit report on an occasional basis to ensure that all your information is being reported accurately.

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Earnest is a technology company using software automation, smart design, and exceptional service to restore trust in the lending industry and help clients take control of their finances.