Soft Pull vs. Hard Pull: How Each Affects Your Credit

Reading your credit report doesn’t change your score. Applying for credit will most likely result in a hard inquiry that could potentially lower your score (even if your application is denied).

Inquiry (hard vs. soft): Sometimes referred to as a hard or soft pull, a credit inquiry records when a business reviews your credit information. Credit inquiries have two labels:

• Hard inquiry (hard pull): An inquiry made when you submit a credit application. It may lower your score temporarily.
• Soft inquiry (soft pull): An inquiry that won’t alter your score.

Neither type of inquiry necessarily indicates the amount of information in your report that was viewed.

What changes when a credit check is a hard pull?

Soft inquiries may occur when you review your own report, when your creditor reviews your credit, or when a business checks your eligibility for a prescreened credit offer. Lenders may use soft inquiries to determine what kind of loan you might qualify for. When you submit a credit application, the lender will most likely perform a hard inquiry.

Each time credit is applied for, most applications will result in an inquiry being placed on your file. An inquiry records that your credit has been checked, and it does not necessarily indicate that you actually opened an account or took out a loan.

One loan search can involve both kinds of pull

Let’s say you’re looking for a personal loan and you get rate quotes from two lenders. Assuming the check that accompanies your loan application is a soft credit check (many loan applications spell this out), neither inquiry will hurt your score. When you’re ready to apply for a loan with one of those lenders, you’ll make a full loan application. That’s when the lender will perform a hard inquiry, which is disclosed in the loan application.

Remember, these are separate from the soft inquiries performed during prequalification, and those soft inquiries won’t suddenly become hard inquiries. Whether this counts as a hard or soft pull depends on the lender.

There’s no clear line between credit checks labeled “prequalified,” “preapproved,” and “check your rate,” either. Some lenders use this language to mean you’ll only receive a soft inquiry, but others aren’t as clear. Just be aware that getting prequalified doesn’t necessarily mean you’re approved. Prequalification only provides an estimate of what your rate and terms might be. It doesn’t guarantee you’ll receive the same terms, or that you’ll be approved at all.

Find out who may obtain your credit report, and whether a company might conduct a hard inquiry. If you submit an application through a website that forwards the application to other companies, ask whether a company that receives your application could pull your credit later on. Just because one company does a soft pull doesn’t mean another company will do the same.

A hard inquiry has two different timelines

How long will it stay on my credit report? Most inquiries remain listed for only a short time, usually around two years for hard inquiries. Hard inquiries also include the date they occurred, so you and a potential lender can see exactly when they happened.

Time in a score calculation: FICO Scores take into account inquiries that occurred in the previous 12 months. Different FICO Score models may use different criteria. The following information applies only to FICO Scores. Note that these are two different limits. Learn more about timing of inquiries and shopping for better rates on credit cards and loans.

For example, let’s say you had a hard pull made against your credit 18 months ago. While FICO scores don’t factor that in anymore, it can still show up on your report. Just because you see it on your report doesn’t mean it’s dragging your score down.

There’s no set amount of points deducted from your score for hard inquiries and no guarantee as to when your score will recover. Your credit score is calculated using a number of different factors, including payment history, balances reported, etc. So there’s no way to say for certain that your score will go back up to where it was before the hard inquiry was reported.

Keep in mind that if a new account is opened after a hard pull, that new account also factors into your score.

Several loan checks can count as one for scoring

FICO scoring models give special consideration to multiple inquiries of one eligible type (auto, mortgage, or student loan) that fall within a set time frame: 14 days in older FICO models, 45 days in newer FICO models.

Contrary to popular belief, rate shopping does not mean you can make an unlimited number of applications during this time without affecting your score. It is a specific scoring rule used to determine how certain inquiries will be treated in the FICO Score algorithm.

Let’s say you shop around and apply for auto loans with three different lenders. Each lender reviews your credit, resulting in three hard inquiries on your report. When it comes time to compute your FICO Score, those three inquiries may only count as one, assuming they were made within a 10-day window and qualify for this treatment.

Unlike eligible mortgage and auto loan inquiries, multiple credit card applications within 10 days do not receive FICO’s special grouping treatment. Personal loans don’t get the same consideration from FICO as mortgages and auto loans do. When you receive quotes for loans that explicitly use soft inquiries, these won’t alter your score. Applying for multiple loans may result in multiple hard inquiries on your report, and may negatively impact your score.

Whether inquiries are grouped or count individually depends on which credit scoring model is used. For instance, VantageScore 4.0 has a more expansive inquiry grouping rule, counting all inquiries made within 14 days as one. So it’s not accurate to say that all inquiries are grouped or that all inquiries count individually.

• Credit monitoring services might show a different scoring model than lenders. Always verify the name and version of the scoring model used.
• If you’re comparing rates for an auto, student, or mortgage loan that’s eligible for special treatment, try to do it within 14 days, as it works with both FICO shopping windows.
• Rate shopping exceptions don’t remove inquiries from your credit reports, and they don’t assure the rest of your FICO Score will remain the same.

“Soft” does not mean permission never matters

Soft and hard inquiries are made for different reasons. An employer doing a credit check for employment purposes will generally have to get your written permission, but it’s still considered a soft inquiry. Your permission may be baked into the terms of service you’re agreeing to when applying for credit. That’s why it’s important to read the fine print!

And while your bank or card issuer can perform a credit check during a routine account review without checking in with you first, there are still federal regulations in place that limit who can pull your report and for what reason (also known as a “permissible purpose”). In other words, the rules around who can access your report and for what reason don’t change based on whether or not the credit inquiry is considered hard or soft.

Read an unfamiliar inquiry as a record of access

Credit score alerts alone don’t provide all the information you need, and it’s best to look at your full credit report instead. Your report is broken down into sections including balances, inquiries, accounts, and payment history.

Soft and hard inquiries will be under the inquiries section, although the exact format and terminology varies from report to report. Check the name of the business that pulled your credit, the date of the inquiry, and whether it was classified as a hard or soft pull.

If you’re unfamiliar with a business name that’s applied to check your credit, it’s worth investigating to make sure it’s not fraudulent. Note that credit card inquiries may appear under the card’s issuing bank’s name, and some lenders use third-party companies to carry out credit checks.

If you’re unfamiliar with a hard inquiry, first check that the date matches up with any credit applications you’ve made. You can also contact the business using the details listed on your report to find out which transaction the inquiry relates to.

An inquiry showing up on just one credit report instead of all three isn’t unusual since each credit bureau maintains its own file. If you can’t figure out why you’re seeing a hard inquiry on one credit report, it might help to request credit reports from the other two credit bureaus.

You may order free credit reports from Equifax, Experian, and TransUnion at AnnualCreditReport.com. Note that requesting your own reports leaves your score unchanged.

When to dispute an inquiry

Check each inquiry and verify that they’re legitimate and accurate. If you’re unfamiliar with an inquiry or think it’s inaccurate, you can submit a dispute to the credit bureau(s) reporting it. Include the name of the business that made the inquiry and the date of the inquiry, and describe what you think is inaccurate.

Retain a copy of your dispute. You can also request an investigation from the business that made the inquiry, but you don’t have to wait for their response before disputing a credit report error.

Inquiries that are accurate and legitimate do not have to be deleted, even if you didn’t like the effect they had on your score, didn’t like that you were turned down for credit, or decided not to take out a loan.

However, if you think that identity theft is to blame for an inquiry, don’t sit around waiting for a creditor or credit bureau to educate you about the process. Head to IdentityTheft.gov and initiate an identity theft recovery plan.