Key Takeaways:
Your credit report will show both hard and soft inquiries.
There are some important differences between the two types of inquiries, including who can see them, how long they remain on your credit report and how they may impact your credit score.
Hard inquiries may impact your credit score, but soft inquiries are not a credit score factor.
Disclosure:
This post only contains educational information. No financial, tax or legal advice.
This information is for educational purposes only and we do not guarantee the accuracy or completeness of this information. This information does not constitute financial, tax or legal advice and you should consult your own professional adviser regarding your situation. This website may contain links to third party websites. We are not responsible for their content or data collection. Trademarks used in this material are property of their respective owners and no affiliation or endorsement is implied.
Hard and soft inquiries, sometimes referred to as credit checks, are requests to view your credit report by lenders, landlords, employers and companies that are authorized to do so. Both hard and soft inquiries will be listed on your credit report. However, only one type of inquiry impacts your credit score. Below are the important differences between the two you should know.
What is a soft inquiry?
A soft inquiry, sometimes referred to as a soft credit check, may appear on your credit report when a company or person receives limited information to make a promotional offer, which is called a promotional inquiry, or check your credit as part of a screening process, which is called an account review inquiry.
When are soft inquiries used?
Soft inquiries can appear on your credit report when a company receives information to make an offer of credit, like a pre-approved credit card or loan offer. When these promotional inquiries happen, the company does not receive your credit report.
Soft inquiries can also occur when an insurer pulls your credit for underwriting purposes, an employer verifies your credit or if a landlord screens you as a potential tenant. You may also see a soft credit check if you pull your own credit report for review. Some loans, like Buy Now, Pay Later installment loans, may also require a soft inquiry before you’re approved for a purchase. When these account reviews occur, the person or company may receive a copy of your credit report.
How long do soft inquiries stay on your credit report?
Promotional inquiries can stay on your credit report for one year, while other soft inquiries may stay on your credit report for two years.
Only you can see all the soft inquiries on your credit report. Users of the same product or in the same industry can see soft inquiries that other users can’t see. For instance, insurance companies can see other insurance soft inquiries on your credit report, but they can’t see other types of soft inquiries.
What is a hard credit inquiry?
A hard inquiry may appear on your credit report when someone accessed your credit report in connection with an application for credit. Typically, you’ll see hard inquiries on your report after applying for traditional credit products like credit cards, mortgages and auto loans. Lenders can only access your credit report if they have a permissible purpose. Permissible purpose is a reason specified in the law that allows someone to check your credit report.
How long do hard inquiries stay on a credit report?
Checking your credit report consistently is important. You want to make sure your credit report information is accurate. Hard inquiries can remain on your credit report for up to two years. An unfamiliar hard inquiry could be a sign of fraud. If you see a hard inquiry you don’t recognize, a good first step is to contact the lender directly. Each company who requested your report will be listed, along with their contact information.
Do credit inquiries affect your credit score?
Soft inquiries do not affect your credit score. Hard inquiries can lower your credit score, though it is one of the less influential credit score factors. The impact of hard inquiries on your credit score tends to lessen over time.
If you’re in need of a loan, bunching inquiries during a short time frame can help limit the negative impact on your credit score. For example, if you make several applications for a mortgage loan within a certain time frame, the scoring model will likely count all of them as a single inquiry. For the VantageScore® 3.0 scoring model, that time frame is 14 days. Among popular scoring models, this is the tightest time frame, so you may want to try to get your loan shopping done within two weeks. This way, you can feel confident you’re getting the best rate while minimizing the impact on your credit score.
Hard vs soft pull: Key considerations
Generally speaking, hard inquiries show up on your credit report when you’ve filled out an application for credit and the company you authorized pulls your report to analyze your creditworthiness. Soft inquiries can appear for a variety of reasons, including promotional offers, employment verification and even you pulling your own report. Only hard inquiries affect your credit score.
Even though hard inquiries have a relatively minor impact on your score, they’re one of several important pieces of your credit report. To learn more about your TransUnion credit report and how your credit report information can affect your credit, we’ve created an interactive credit report guide to help you understand each section.
