Hard Pull vs Soft Credit Pulls: What’s the Difference?

True or False: Checking your credit score will negatively affect your score.

Answer: False. Whenever you check your credit score, this uses a soft inquiry, which doesn’t hurt your score. However, a hard inquiry, like when you apply for a mortgage loan, can cause a temporary dip. 

This is the major difference between hard and soft credit checks. But what are they, and how do they impact your credit? 

In this article, we answer common questions about the difference between a soft pull and a hard pull, how they affect your credit score, and how you can monitor your credit activity. 

What is a Soft Credit Pull?

A soft credit pull, also known as a soft credit check, is when you or someone else views your credit history to see if you’re eligible for a credit card or loan, even if you’re not looking to build your credit. Employers may also use soft credit checks to perform a background check after you accept a job offer. 

Soft Pull Explained

You might wonder, “Does a soft pull affect my credit?” A soft pull has zero effect on your credit. Think of it as a glance at your credit, not a deep review of every transaction. All the other person is looking to learn is whether you’re financially responsible. 

For example, if you submit a rental application, your potential landlord might perform a soft credit check to see if you would be a dependable tenant. 

Soft Pull Examples 

You might be surprised to learn you’ve already experienced soft credit checks without even realizing what was happening behind the scenes. Here are a few common scenarios of when a company might perform a soft inquiry: 

• Car insurance quotes: If you’re shopping for cheaper car insurance, your insurance rep will do a soft pull to assess your risk profile. 
• Pre-approved emails or physical mail: If you see a letter saying, “You’ve been pre-approved,” this is the result of a soft credit check.
• Open a new checking or savings account: If you open a new one, the bank may perform a soft inquiry to verify your identity. 

How Long Do Soft Inquiries Stay on Your Credit Report?

While soft inquiries don’t affect your credit score, they can show up and stay on your credit report for 12 to 24 months. The good news is that only you can see them, not lenders or employers. 

What is a Hard Credit Pull?

A hard credit pull, also known as a hard credit check, happens when you apply for a credit card or a loan. Unlike a soft pull, a hard pull can temporarily knock your credit score down a few points. 

Hard Pull Explained

Think of a hard credit pull as a work evaluation. But instead of your manager assessing your performance to offer you a raise or promotion, a lender reviews your financial performance to see if you’re responsible enough to borrow money. 

For example, if you apply for a mortgage loan, the lender will take a deep look at your past credit history to see if you can pay your monthly mortgage bill. 

Hard Pull Examples 

You may encounter hard credit pulls at various points throughout your lifetime. Here are some of the common scenarios in which you might grant permission for someone to perform a hard inquiry: 

• Mortgage application: If you plan to buy a property, the lender will conduct a hard pull to see if you qualify. 

• Credit card application: Anytime you apply for a new credit card, the issuer will run a hard pull to assess your risk as a borrower. 
• Car loan application: If you plan to buy a new or used vehicle using a car loan, a lender will perform a hard credit check to determine if you have a healthy credit history. 
• Requesting a spending limit increase: Some credit card issuers may perform a hard pull if you increase your credit limit. 
• Buy now, pay later plans (BNPL): Some BNPL providers may perform a hard credit check if you choose a longer-term installment option. 

Is There a Limit on Hard Credit Checks? 

There is no limit on how many hard credit checks you can have. However, if you’re applying for several different types of credit in a short amount of time, then lenders will raise concerns about your financial health.

Each hard credit inquiry knocks off a few credit score points, and too many simultaneously show lenders you might be in a poor economic situation. 

Can You Remove Hard Inquiries?

Every hard inquiry you have stays on your credit report for two years, but they only affect your credit score for the first 12 months. You can’t remove hard inquiries since they’re conducted with your permission. But if you see a fraudulent inquiry on your credit report, be sure to report it to the credit bureau as soon as possible to have this inquiry removed. 

How to Minimize the Damage of Hard Credit Pulls

Making a plan is the key to minimizing the damage of hard credit pulls. Here are a few tips on how you can protect your credit score and maintain a healthy financial standing:

• Shop for loan rates within a short time frame to group inquiries into one inquiry. 
• Make loan and credit card payments on time.
• Keep your credit card spending to a minimum. 
• Only apply for new credit when you need it. 

Key Takeaways: Soft vs Hard Credit Check 

So, what’s the difference between a hard and soft inquiry, and how can you protect your credit health? A soft inquiry is voluntary and doesn’t affect your credit score. A hard inquiry requires your permission and temporarily brings your score down a few points.

Here are four key takeaways with soft pull vs hard pull checks to remember.

Apply Only for the Credit You Need

Don’t let your credit score take a hit for each hard inquiry. Only apply for the credit you need. Being selective helps keep your credit score in good shape and shows lenders you’re financially responsible. 

Get Pre-Approved

If you’re looking to build credit but haven’t applied for any loans or credit cards yet, see if you get pre-approved first. Most banks, credit card companies, and lenders have tools on their websites where you can submit your information for them to run a soft credit check for pre-approval. 

This is a low-risk way to see if you’re eligible to borrow money without impacting your credit score. 

Monitor Your Credit

Check your credit score to keep track of soft and hard credit inquiries. Monitoring your credit score lets you see your payment progress and keeps you informed about any signs of fraud. 

Limit Pulls When Planning Large Purchases

Looking to buy a new car or your first home? Try to limit hard credit pulls as much as possible beforehand. Too many hard inquiries can lower your score when you need healthy credit to be approved for a loan at a lower interest rate.

Stay on Top of Your Soft Pull vs Hard Pull Credit Activity

Now that you know the difference between a soft pull vs a hard pull, we have one last pop quiz question for you to answer.

True or False: Monitoring your soft and hard inquiries is a wise financial decision.  

Answer: True. Staying on top of your soft and hard credit pulls can help you spot fraud early, find ways to protect your score, and make more informed borrowing decisions the next time you need credit.

Looking to improve your credit score? Monitor your credit report regularly and be strategic to avoid the negative effects of hard inquiries.