Credit inquiries play a subtle but important role in determining your credit score. Whether you’re applying for a loan, credit card, or even a new apartment, lenders often check your credit history to assess risk. However, not all credit checks are the same. Understanding the difference between hard and soft inquiries—and how they affect your score—can help you manage your credit health more effectively.
What Is a Hard Inquiry?
A hard inquiry occurs when a financial institution checks your credit report as part of a lending decision. This usually happens when you apply for credit—such as a mortgage, car loan, or new credit card. Because it indicates that you’re actively seeking new debt, a hard inquiry can temporarily lower your credit score by a few points, typically between 5 and 10.
While one or two hard pulls aren’t a big deal, multiple inquiries in a short time can signal risk to lenders. For example, applying for several credit cards within a few weeks may make it seem like you’re taking on too much debt. Fortunately, credit scoring models like FICO and VantageScore treat multiple inquiries for the same type of loan (such as a mortgage or auto loan) made within a short period—usually 14 to 45 days—as a single inquiry.
What Is a Soft Inquiry?
A soft inquiry, by contrast, does not impact your credit score. These checks occur for informational or background purposes rather than lending decisions. Examples include checking your own credit report, prequalification offers, or employer background checks. Because they aren’t linked to a specific credit application, soft inquiries remain visible only to you and don’t affect how lenders view your creditworthiness.
When and How to Manage Inquiries Wisely
If you’re planning a major purchase, it’s smart to minimize unnecessary hard pulls. Avoid applying for multiple lines of credit at once, and space out applications when possible. You can also use prequalification tools—these use soft inquiries—to see potential loan terms without affecting your score. Regularly reviewing your credit report ensures accuracy and helps you catch any unauthorized hard inquiries, which could be signs of identity theft.
How Long Inquiries Stay on Your Report
Both hard and soft inquiries appear on your credit report for up to two years, but only hard inquiries influence your score. Even then, their effect fades over time, typically disappearing from scoring calculations after about 12 months. Maintaining consistent on-time payments and low credit utilization has a much greater impact on your score than a few inquiries.
Conclusion
Credit inquiries are a small but meaningful part of your financial picture. While hard inquiries can slightly lower your score, their impact is temporary and manageable. By understanding when and how to apply for credit strategically, you can protect your credit health and continue building a strong, reliable financial foundation.
