Hard Pull vs. Soft Pull on Credit: What You Need to Know

Your credit score is one of the most valuable assets in your financial future. 

That three-digit number helps mortgage lenders determine your lending “risk,” how much it would cost to lend, and which financing options will work best for you.

As you’d expect, your credit score impacts numerous situations, such as applying for a credit card, renting an apartment, buying a car or home, or even deposit amounts for utility companies. 

You want to ensure that you have a grasp on what can hurt your score and how to protect it. One factor that can have an influence is a credit inquiry. So, what are the different types of credit inquiries? And more importantly, which kind can affect your credit?  

What is a Hard Credit Inquiry? 

Hard inquiries, or "hard pulls," occur when lenders check your credit for a lending-related decision. Such as, when you apply for a mortgage, loan, or credit card, and they require your authorization.

A hard inquiry can lower your credit score by a few points but usually has a minor, short-term impact. One-off hard inquiries rarely affect credit approval, but they will stay on your credit report for around two years. 

While one hard inquiry isn’t much cause for concern, applying for multiple credit cards or loans within a short period can raise red flags for lenders. They signal financial risk to lenders, so try to space out credit applications to protect your score. 

When applying for credit, lenders check with Experian, TransUnion, or Equifax – the three major credit bureaus. Each hard pull drops your score slightly, typically less than five points, and remains visible to anyone checking your credit. 

If you're planning a significant financial move, like buying a house, it’s best to minimize credit applications in the preceding months. However, if you’re rate shopping for a mortgage or car loan, multiple inquiries within a short period (usually 14 to 45 days) are treated as a single inquiry by credit scoring models, minimizing the impact on your score. After all, mortgage lenders expect you to shop around for the right fit on such an important decision. 

Is There a "Hard Inquiry Limit?” 

There's no hard and fast rule for how many hard inquiries is too many. 

Multiple inquiries in a short period of time could indicate a higher credit risk to lenders. According to the Fair Isaac Corporation (FICO®), those with six or more hard inquiries are eight times more likely to file for bankruptcy than those with no inquiries. 

Hard Inquiry Examples   Common examples of hard credit inquiries or pulls include: 

• Loan applications 

• Credit card applications 

• Credit limit increase requests 

• Applications for lines of credit 

• New utility applications 

• Apartment rental applications 

What is a Soft Credit Inquiry?

Soft inquiries, also known as "soft pulls" or "soft credit checks," occur when a person or organization reviews your credit as part of a background check. This can occur, for example, if a credit card issuer assesses your creditworthiness for pre-approval offers or if a potential employer checks your credit during the hiring process. 

A key difference between soft and hard inquiries is that soft inquiries DO NOT impact your credit score. 

But remember: These inquiries can happen without your explicit consent, but there's no need to worry since they won't harm your credit score. Unlike hard pulls, which lenders use to evaluate a specific credit application, soft pulls are simply “checks” unrelated to a direct credit request. 

Do Soft Inquiries Appear on Credit Reports?  

Soft inquiries DO show up on credit reports, but they are usually only visible to the individual whose credit is being checked. These inquiries are not shared with creditors or lenders who might be reviewing the report for lending purposes.

This means that while you can see the record of soft pulls when you access your credit report, other parties considering you for a loan or credit line won't be able to see these entries. 

Soft Inquiry Examples 

Common examples of soft credit inquiries or pulls include: 

• Checking your credit report 

• Pre-qualified credit cards and loan offers 

• Insurance quotes 

• Employment background checks 

• Landlord screenings 

• Credit monitoring services 

What if My Credit is Pulled Without Permission? 

Always be on the lookout for any errors or unexpected hard credit checks. If a hard pull happens without your consent, it might be a sign of attempted identity theft. Here are a few things you can do if you find an unauthorized credit check: 

1. Contact the Creditor: Reach out to the creditor directly for more information. The Federal Trade Commission (FTC) reports that one in five people find errors on their credit reports, so it’s possible the pull was a mistake. 

2. Dispute with Credit Bureaus: If you discover an error or unauthorized hard pull, submit a dispute to the credit bureau that reported it. The dispute process typically takes about 30 days. 

3. File a Formal Complaint: If you believe your credit was used fraudulently, file a complaint with the Consumer Financial Protection Bureau (CFPB) or visit IdentityTheft.gov, which is managed by the FTC.  

How Can You Protect Your Credit Against Inquires? 

If you want to apply for a credit card or home loan, you can’t avoid the hard inquiry. 

However, there are a few things you can do to minimize the likelihood your score will be negatively affected by a hard pull. 

First, limit the number of your hard inquiries. While one hard pull may impact your score by a few points, if any, multiple inquires in a short time frame may cause significant damage to your score. Try to keep it to less than one or two a year, if possible. 

Next, say “no thank you” to store credit cards offered to you at checkout. The one-time savings they offer usually aren’t worth the risk to your credit. Lastly, monitor your credit score. If you notice a hard pull on your report that you did not authorize or initiate, you may need to dispute it with the credit bureaus. While the potential of your score dropping can seem very scary, it doesn’t need to be. Learning what impacts your score can help you easily and confidently get the credit you need. 

Let’s keep the conversation going! Now that you’ve learned about hard and soft inquiries, future homeowners, take the next step by learning about the money you’ll need upfront to purchase your dream home!