The Difference Between a Soft and a Hard Credit Inquiry

copy of credit report

If you've been working to boost your credit score or researching auto loans, you've probably come across the phrases "hard inquiry" and "soft inquiry" in relation to your credit report. What makes one inquiry "hard" and the other "soft," and why is knowing the difference important for your financial health?

A hard inquiry is when a potential lender pulls your credit report from one of the credit bureaus to determine your credit worthiness for things like a car loan, a credit card, a mortgage, or an apartment rental. This kind of inquiry requires your approval first, so you shouldn't be surprised to see it on your credit report if you've authorized a credit check. (And if you are surprised, keep reading...we'll tell you what to do when you spot an unauthorized credit inquiry.)

The other thing about a hard inquiry is that it temporarily knocks a few points off your credit score. That's usually no big deal, unless you're working hard to keep your score up to purchase a home or you've been shopping around for a lot of credit recently. Multiple hard inquiries can pull your score down significantly and scare off lenders, who might be wondering if you're in financial trouble and trying to stockpile open credit lines, so avoid applying for a lot of credit in a short time period.

That said, if you've been shopping around for a new car and you have multiple dealers making hard inquiries with credit bureaus, they're typically treated as a single inquiry if they occur within a short time period. The same thing goes when you're shopping for the best mortgage rate. While these hard inquiries stay on your credit report for 24 months, the dip in your score may only last a few months, especially if you handle your credit obligations responsibly. In fact, your score may even go up with several months of timely payments on your loan.

This brings us to the soft inquiry. A soft inquiry on your credit can occur with or without your prior authorization but it has no effect on your credit score, unlike a hard inquiry. When you look at your credit report, you'll be able to see all the soft inquiries that have been made, along with the dates they occurred. If you use apps or services that offer free credit scores, the data they're using comes from soft inquiries. If you receive pre-selected offers for credit cards in the mail, potential lenders have made soft inquiries on your credit to determine if you're a good fit for their offers.

However, once you decide to take advantage of a pre-selected offer, be sure to read the fine print: Even though you've been pre-selected, you will be giving the lender approval to make a hard inquiry on your credit report before they make a firm offer of credit. 

In a nutshell: a soft inquiry is typically used for informational purposes, unlike a hard inquiry, which occurs when there's an actual credit decision on the line. 

Now let's say you look at your credit report and notice there's a hard inquiry you don't recognize. There could be several reasons it's there. Sometimes department store or gas credit cards are authorized through a financial institution other than the retailer, or multiple lenders will do credit checks for a car loan initiated through a dealership. If the inquiry still doesn't make sense, you can contact the lender that initiated the check and ask for more details, or contact the credit bureau reporting the inquiry and file a dispute. The credit bureau will remove the inquiry if their investigation shows it's not legitimate.

At this point, you should consider adding a fraud alert to your credit report if the inquiry cannot be explained. It could indicate that someone was trying to open up a credit line in your name and that extra scrutiny is required for future checks on your account. (By the way, when you open up a fraud alert with one credit bureau, it'll inform other credit bureaus of the alert.)

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About Author

Diana Burrell
Diana Burrell

Diana Burrell is the marketing communications director at Hanscom FCU. She has a background in magazine journalism, as well as marketing, advertising, and public relations, and has authored over a dozen books. You can reach her at

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