2 min read

Hard credit inquiry vs. soft credit inquiry: what's the difference?

If you’ve applied for a credit card, financed a car, or taken out student loans to help finance education, odds are you’ve been subject to what is called a “hard inquiry” on your credit. 

Lenders check your credit with a hard inquiry to assess how you’ve managed credit in the past - if you’ve paid your bills on time, and whether you have any negative marks on your credit reports. 

There’s another type of credit check - a soft inquiry - that occurs in instances when you check your own score, or a person or company sends a preapproved offer or reviews your account. 

Here’s a look at each type of inquiry, and what you need to know. 

What is a hard inquiry?

A hard inquiry, sometimes called a “hard pull” or “hard credit check”, is a request to check your credit, typically by a financial institution looking to make a decision about your loan or credit card application. This type of inquiry will become part of your credit report, and could lower your score by a few points. 

Hard inquiries generally stay on your credit report for about two years, but will have less of an impact on your score over time.

While a single inquiry is unlikely to have a major impact on whether you are approved for credit in the future, multiple hard inquiries in a short period of time may lead lenders to consider you a riskier applicant. To avoid this, consider spreading out applications for credit over time. 

Here are a few common hard inquiries:

  • Credit card applications
  • Some personal loan applications
  • Apartment rental applications
  • Mortgage applications
  • Auto loan applications
  • Student loan applications

What is a soft inquiry?

A soft inquiry, sometimes called a “soft pull” or “soft credit check,” occurs when you check your own score, or when a person or company checks your credit as part of a background check or prequalification process. 

Unlike hard inquiries, soft inquiries don’t impact your credit scores, and are only visible to you when you view your credit reports. 

Keep in mind, you can check your score without affecting your score, as it will be recorded as a soft inquiry. There are many free services like Credit Karma or NerdWallet, or you can use to get your reports from the three major credit bureaus. The reports are free and, until April 20, 2022, you are eligible to receive one per week.

Here are a few common soft inquiries:

  • Checking your own credit score
  • “Pre-qualified” credit card, loan, or insurance offers
  • Employment verification and background checks

How to minimize the effect of hard inquiries

If you’re in the market for a mortgage or auto loan, there are still ways you can shop around for the lowest interest rates without facing multiple hard inquiries.

For example, FICO gives you a 30-day grace period before certain loan inquiries, like those for mortgage or auto loans, are reflected in your scores, and they will record multiple inquiries for the same type of loans as a single inquiry as long as they’re made within a certain window. This window is typically 14 days. 

Does Salary Finance perform hard or soft inquiries upon application?

When you apply for a Salary Finance loan, we will first check your credit with a soft inquiry, which means applying for a Salary Finance loan will not affect your credit score. If you are approved and decide to sign your loan agreement and accept your loan, only then will a hard credit inquiry appear on your credit report.