The Difference Between Hard and Soft Credit Inquiries

Not all credit inquiries are the same. When someone reviews your credit profile, their inquiry falls into one of
two categories – hard or soft – depending on who’s viewing your credit. Here’s the difference…

When you apply for credit, the issuer pulls your credit report from one of the three major credit bureaus. This
is a hard inquiry. A hard inquiry can lower your credit score by a few points based on your credit profile. A
hard inquiry stays on your credit report for about two years, but it won’t affect your credit score for longer
than one year.

Soft inquiries often occur without you even knowing about them and don’t negatively affect your credit
score. Soft inquiries are things like background checks conducted by an employer, or companies you already
have credit with checking to see if you’re still creditworthy.

You can avoid hard inquiries by being strategic. For example, don’t apply for credit cards that you don’t
need.

The more informed you are about what happens when you apply for credit, the better prepared you’ll be for
the process.