Hard Credit Pull vs Soft Credit Pull - What's the Difference?

There are two different types of credit pulls that can show up on your credit report in the inquiry section:  hard and soft inquiries also known as pulls. There is a lot of talk about how inquiries can impact your credit score, but what is accurate? Soft pulls do not negatively impact your credit score, but a hard pull will.  

A hard pull occurs when you apply for credit of any kind such as a mortgage, credit card, or a loan. According to FICO, hard pulls made within the past 12 months can influence your score, but will stay on your credit report for 2 years. A hard inquiry can decrease your FICO score each time you apply for credit, so it is important consider this before applying for a credit card you may not need. Creditors look at your credit report to understand your financial situation. If you've been applying for loans from multiple lenders, it could be a sign that you're desperate for money. And some lenders see risk in that. However, when you are rate shopping for a mortgage or car loan, all inquiries within a 45-day window count as a single inquiry.

A soft inquiry can occur several different ways. Companies that send out pre-qualification letters often do a soft pull of your credit first. Because you are not directly applying for credit, these inquiries do not negatively impact your score. Checking your own credit is also a soft inquiry, so never be afraid to check your credit over concerns that it could hurt your score. You can check your credit report for free on annualcreditreport.com


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