September 20, 2023

What is the Difference Between Credit Score 'Hard Inquiry' vs 'Soft Inquiry'?

Explore the key differences between hard and soft Inquiry credit inquiries. Learn how they affect your credit score and when each type is used.

Understanding the difference between a 'hard Inquiry' and a 'soft Inquiry' in credit inquiries is essential for anyone dealing with finances. A hard Inquiry can affect your credit score and is often used by lenders to assess your creditworthiness. A soft Inquiry, on the other hand, doesn't impact your credit score and is typically used for background checks or pre-approvals. 

This introduction will lay the foundation for a closer examination of hard Inquiry vs soft Inquiry, focusing on their specific roles and effects on your financial standing. Knowing these terms can lead to better financial decisions and credit management.

Interested in exploring more about credit management?

Dive into these insightful reads: Cracking the Code: The Art of Closing Credit Cards, a comprehensive guide to closing credit cards without harming your credit score, and

How Does a Credit Builder Loan Build Credit? where you can discover the mechanisms behind credit builder loans and how they can help you establish or rebuild your credit history.

Basic Definitions: Hard Inquiry vs. Soft Inquiry

Hard Inquiry

A hard Inquiry is what happens when a lender looks at your credit report to check if you qualify for a loan or credit card. It's a serious step, and it shows up on your credit report. 

This can knock your credit score down by 5-10 points, and it stays that way for about a year. 

When you apply for a personal loan, auto loan, or mortgage, the lender typically performs a hard inquiry to assess your creditworthiness.

Applying for a new credit card often involves a hard inquiry. So does apartment rentals, insurance policies etc.

Soft Inquiry

A soft Inquiry is a lot less serious. It's a quick look at your credit report that doesn't change your credit score. You can do it yourself, or a company might do it if they're thinking about offering you something like a pre-approved credit card. 

Other lenders can't see soft Inquiries, so they don't know how many you've had. It's a way to check on things without making any big waves in your financial life. It keeps your credit score safe and gives you or others a sneak peek at how you're doing with the money.

When you check your own credit report or score through a credit monitoring service or a credit bureau's website, it's considered a soft inquiry and doesn't impact your credit. Employers may also conduct a soft credit check as part of the hiring process to evaluate your financial responsibility, especially for positions involving financial responsibilities. Prequalification for credit cards also involves the same process.

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Situations Leading to Hard and Soft Inquiries

Where are all Hard Inquiries used?

Hard Inquiries are more impactful compared to soft Inquiries. Some examples of such Inquiries are as follows:

  • Mortgage Applications: When you apply for a home loan, banks conduct a hard Inquiry to assess your creditworthiness.
  • Auto Loans: Applying for a car loan results in a hard Inquiry.
  • Credit Card Applications: When you want a new credit card, companies perform a hard Inquiry.
  • Renting an Apartment: Landlords might do a hard Inquiry before leasing you a property.
  • Utility Service Setups: Companies like electricity or water providers might conduct a hard Inquiry.

Hard Inquiries are likened to a loud announcement about your financial habits, while soft Inquiries are more like a quiet conversation. Hard Inquiries provide in-depth insight but can leave a temporary mark on your credit profit.

Soft Inquiries

Where are all Soft Inquiries used?

Soft Inquiries are less stressful compared to hard Inquiries. Some examples of such Inquiries are as follows:

  • Checking Your Credit Score: When you check your credit score yourself, it's considered a soft Inquiry, and it won't affect your score.
  • Special Deals and Offers: Companies might perform a soft Inquiry to see if you qualify for special deals, such as pre-approved credit cards.
  • Employment Background Checks: Some employers use soft Inquiries as part of a background check during the hiring process.
  • Handling Money Insight: Soft Inquiries allow others to see how you handle money without affecting your credit.

On the flip side, soft Inquiries are likened to a quiet conversation about your finances, while hard Inquiries are more like a loud announcement. Soft Inquiries provide information without leaving a lasting mark on your credit profile.

What is the impact of Inquiry on Credit Score?

Hard Inquiry

A hard Inquiry is a formal credit inquiry that can temporarily lower your credit score by 5-10 points. This effect typically lasts for about a year. 

If you apply for different types of credit, such as credit cards, car loans, or mortgages, multiple hard Inquiries can accumulate, leading to a more significant impact on your score. It's essential to be aware of this when applying for credit, as the reduction in your score could affect your ability to secure loans or receive favorable interest rates. Worried about the impact of hard Inquiries on your credit score? Build your credit with on-time payments through Bright Builder. Discover how at Bright Money

Soft Inquiry

In contrast, a soft Inquiry has no impact on your credit score. You can initiate soft Inquiry yourself or allow companies to do so for pre-approval offers or employment checks. Unlike hard Inquiries, soft Inquiries are not visible to other lenders, preserving the integrity of your credit score. 

This allows you to explore various credit options and employment opportunities without fear of damaging your credit. Understanding the difference between hard and soft Inquiries can help you manage your credit more effectively and make informed financial decisions.

Duration of Inquiries on Credit Report

Hard Inquiry

A hard Inquiry stays on your credit report for two years, but it only affects your credit score for about one year. Even though it might seem like a long time, the impact lessens as time goes on. If you keep up with your bills and don't take on too much debt, you can make up for the points you lost. Soft Inquiries are like a small scratch that fades away if you take care of it. 

Soft Inquiry

A soft Inquiry is different. It doesn't show up to lenders, and it doesn't stay on your credit report. It's like it was never there. You can have as many soft Inquiries as you want, and it won't change your credit score. It's a way to check on things without leaving a mark. 

Soft Inquiries give you the freedom to look into credit or job offers without worrying about your credit score. It's a handy tool that keeps your credit safe.

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How to Identify Hard and Soft Inquiries on Your Credit Report 

Checking your credit report regularly helps you spot both hard and soft Inquiries. Hard Inquiries are easy to find. They're listed right there with the name of the lender who asked for them. It's like a record of who's been checking up on your credit. 

Soft Inquiries are a bit different. They might be in a separate section, and other lenders can't see them. It's like a private note just for you. By keeping an eye on these, you can see who's interested in your credit and make sure everything's on the up and up. It's a simple way to stay in control of your financial life.

Minimizing the Impact of Hard Inquiries

Minimizing the impact of hard Inquiries on your credit score is achievable through careful planning. By applying for the same type of loan within a 14-45 day window, known as rate shopping, you can reduce the effect on your score. 

Being selective with credit applications and only pursuing necessary credit opportunities helps you avoid unnecessary hard Inquiries. 

You can also check your credit card statement to see if you have had any hard inquiries conducted for any unknown debts or loans. Regular monitoring of your credit report and disputing any unauthorized hard Inquiries can further preserve your credit health. These strategies offer practical ways to manage hard Inquiries, allowing you to maintain control over your financial standing.

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Understanding the differences between hard and soft Inquiries is like having a roadmap for your financial journey. Knowing when and why they happen and what they mean for your credit score puts you in the driver's seat. 

You can make smarter choices about loans, credit cards, and even jobs. With this knowledge, you can build a strong credit history and head down the road to financial success with confidence. It's a vital part of managing your money wisely.

Take control of your financial future with Bright Money's innovative solutions. From building credit with Bright Builder to managing debt with Bright Debt Plan, we have the tools to help you succeed. Explore our offerings at Bright Money today.

Further Readings

For more insights and guidance on managing your credit and financial well-being, consider exploring these additional resources:


  1. What is a 'hard Inquiry', and when does it occur?

A 'hard Inquiry,' also known as a hard inquiry, happens when a financial institution or lender checks your credit report as part of their decision-making process. Common scenarios include applying for a mortgage, car loan, or credit card. Hard Inquiries can slightly decrease your credit score for a short period and remain on your credit report for two years.

  1. What is a 'soft Inquiry,' and when does it occur?

A 'soft Inquiry,' or soft inquiry, is a review of your credit report that doesn't affect your credit score. Examples include checking your own credit score, pre-approval offers from lenders, or background checks by employers.

  1. How do hard and soft Inquiries impact my credit score?

Hard Inquiries can temporarily lower your credit score by a few points. The impact varies based on your overall credit profile and the number of recent inquiries. Soft Inquiries, on the other hand, have no effect on your score.

  1. Can I limit the number of hard Inquiries on my credit report?

Yes. Before formally applying for credit, ask the lender if they can do a soft Inquiry for a preliminary decision. Additionally, when rate shopping (e.g., for mortgages or auto loans), try to do so within a short window (typically 14-45 days, depending on the scoring model), as multiple inquiries for the same type of credit may be counted as a single inquiry.


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