Hard vs. Soft Inquiries: Know the Difference
One kind can cost you a few points. The other never touches your score.
In this lesson you will learn to
- Tell a hard inquiry from a soft one before you agree to a credit check
- Explain why a hard inquiry costs only a few points and how long the effect lasts
- Spot an inquiry you never authorized and know what to do about it
Every time a company looks at your credit report, the bureau records that look as an inquiry. There are two kinds, and the difference matters. Hard inquiries can lower your score a little. Soft inquiries never affect it. Once you know which is which, you can stop worrying about the wrong things.
What Counts as a Hard Inquiry
A hard inquiry (also called a hard pull) happens when a lender checks your report because you asked for new credit. You have to authorize it, usually by submitting an application. It shows up on your report where other lenders can see it.
Common hard inquiry triggers
- Applying for a credit card (including store cards)
- Applying for an auto loan, mortgage, personal loan, or student loan
- Applying for a home equity line of credit (HELOC)
- Requesting a credit limit increase (some issuers use a hard pull, some don't; ask first)
- Some apartment rental applications
- Setting up some new utility or cell phone plans
- Cosigning a loan for someone else
What Counts as a Soft Inquiry
These are soft inquiries. They never affect your score
- Checking your own credit report or score, through any app or website
- Prequalification tools that say "no impact to your score"
- Prescreened card offers that arrive in the mail
- Your existing card issuer reviewing your account
- Most insurance quotes
- Employer background checks (done with your written permission)
- Identity verification when you open a bank account
Try it: read each situation and pick hard or soft. You get the answer right away.
Situation 1 of 8
You apply for a store credit card at the checkout counter.
Notice the pattern: a hard pull follows an application for new credit. Checks you did not apply for, including every look at your own report, are soft.
Why Hard Inquiries Cost Points at All
Scoring models treat a new application as a mild risk signal. FICO's data shows that people with several recent inquiries miss payments more often than people with none. It makes sense: someone applying for a lot of credit in a short stretch may be under financial stress. But the signal is weak, so the penalty is small. New credit as a whole is only 10% of your FICO score, and inquiries are just one piece of that slice.
Commonly cited drop from one hard inquiry (often less)
How long an inquiry affects your FICO score
How long it stays visible on your report
Score impact of any soft inquiry, ever
FICO has said that for most people, one new inquiry costs fewer than five points. The hit is often larger if you have a short history or only a few accounts. That is where the commonly cited 5 to 10 point range comes from. Either way, the effect fades. The inquiry stops counting toward your FICO score after 12 months and drops off your report after 24.
The life of one hard inquiry
- Day 0
You apply for credit. The lender pulls your report and the bureau records a hard inquiry.
- First year (caution)
Your score may dip a few points, often fewer than five. The dip tends to be larger if your history is short.
- Month 12 (good)
The inquiry stops counting toward your FICO score.
- Month 24 (good)
The inquiry drops off your report.
Quick check
How long does a hard inquiry count toward your FICO score, and how long does it stay on your report?
Check Your Own Credit as Often as You Like
Pulling your own report or score is always a soft inquiry, no matter how often you do it. The old myth that checking your credit hurts it refuses to die, and it keeps people from catching errors early. Check monthly if you want. It costs you nothing.
Rosa finally looks
Rosa, 42, had heard for years that checking your credit hurts it. So she never looked. She paid her bills on time and hoped the report took care of itself.
When her daughter needed a cosigner for a student loan, Rosa pulled her free report for the first time. She braced for a score drop that never came. Checking your own credit is a soft inquiry, and soft inquiries cost nothing. What she did find was a card she had closed six years earlier, still listed as open with a balance she did not owe.
She mailed the bureau a dispute letter herself. The bureau investigated and fixed the entry.
Now Rosa checks her report every month. The look costs her nothing, and an error no longer gets six years to hide.
- • Happens when you apply for credit
- • Requires your authorization
- • Visible to other lenders
- • Can lower your score a few points
- • Counts toward your FICO score for 12 months
- • Happens during background checks, prescreening, or self-checks
- • Never affects your score
- • Most are visible only to you
- • No limit on how many you can have
- • Includes every look at your own credit
Quick check
An insurance company runs your credit for a quote, and a card issuer runs a prequalification check. Did either one cost you points?
An Inquiry You Never Authorized Is a Red Flag
Under FCRA Section 604, a company needs a permissible purpose to pull your credit. Your application for credit is the usual one. A hard inquiry from a company you never applied to may be a data error, or a sign that someone tried to open credit in your name. You can dispute it with the bureau. One honest caveat: an inquiry from an application you really did make is accurate information, and disputing it won't remove it. If you spot one you never authorized, mail the bureau a dispute letter yourself. Ask it to verify the permissible purpose or remove the inquiry.
Real-World Examples
Real-World Example
Devon finds a pull he never made
The Situation
Devon, 31, reviews his report before applying for an auto loan and spots a hard inquiry from a bank he has never contacted, dated three months back. His score dipped slightly around the same time.
What Happened
He mails a dispute letter to the bureau citing FCRA Section 604 and asks it to verify the permissible purpose or remove the inquiry. The bureau investigates under FCRA Section 611 and removes the inquiry within 30 days. He also places a free fraud alert on his file in case someone tried to open an account in his name.
Key Takeaway
Unrecognized inquiries are worth chasing. The points are small, but an unauthorized pull can be the first visible sign of attempted identity theft.
Quick check
You find a hard inquiry from a lender you never applied to. What can you do?
What to remember
- Hard inquiries happen when you apply for credit. They can cost a few points, usually fewer than five.
- Soft inquiries, including every check of your own credit, never touch your score.
- A hard inquiry counts toward your FICO score for 12 months and leaves your report after 24.
- An inquiry you never authorized may be an error or a sign of identity theft. Mail the bureau a dispute letter yourself and ask it to verify the permissible purpose or remove the inquiry.
Do this today
Pull one of your free reports at AnnualCreditReport.com and find the inquiries section. Read each hard inquiry and ask yourself: did I apply for this? Write down any you do not recognize.
Nice work
You can now tell which credit checks matter and which ones never will. That removes a lot of needless worry, and it means you can check your own credit without a second thought. Next up: rate shopping, the one time several hard pulls can count as one.
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