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    The Difference Between A Hard Inquiry And A Soft Inquiry And How It Can Impact Your Credit Score

    Anyone who has ever borrowed some form of credit knows there is an accompanying application process. 

    This helps the lender determine if the applicant's creditworthiness is good enough to justify any credit issuance. 

    This process also allows the lender to decide what terms and interest to apply to the financing. 

    Lenders use credit checks to facilitate this process. 

    Generally speaking, there are two types of credit inquiries: 

    hard and soft. 

    Keep reading to learn the basics of credit inquiries as well as the differences between a hard and soft credit check. 

    • What Is A Credit Inquiry: A credit inquiry is a process that occurs when a lender wants to access a potential borrower’s credit report. The lending party makes a request with one of the three major credit bureaus - Equifax, Experian, or TransUnion - and if the request is deemed legal, the applicant's credit report is passed on to the lender. The only exception is if there has been a credit freeze placed on the account.
    • Hard Credit Inquiry: A hard inquiry is a complete look at a borrower’s credit report by a lender. Almost all types of financing, whether they be credit cards, lines of credit, mortgages, or consolidation loans, will require a hard credit check. The main difference between a hard and soft inquiry is that a hard inquiry will appear on one’s credit report. Too many hard checks can harm an individual's credit score.
    • Soft Credit Inquiry: A soft inquiry allows a lender to have an initial look at one’s credit report. They usually handle this during the pre-approval process to get an idea of how successful an individual's application will be. Soft credit checks do not show up on one’s credit report and do not negatively impact a person's credit score.

    What About Your Credit Score?

    Soft inquiries have no negative impact on one’s credit score; they do not even show up on a credit report.

    On the other hand, hard inquiries are marked on a credit report and may temporarily reduce scores.

    Having too many hard inquiries listed within a short period can negatively impact the likelihood of approval too.

    Having several hard inquiries on one’s credit report may cause a lender to hesitate. 

    Often, they see several new accounts as an indication that the applicant is undergoing some kind of financial distress and requires quick access to capital. 

    This is the primary reason that multiple hard inquiries within a short period will end up lowering one’s credit score. 

    That said, credit bureaus have made some changes to the way they calculate credit scores. 

    They recognize that people applying for large loans, such as a mortgage, will inevitably shop around for the most suitable loan. 

    Because of this, many hard Inquiries within a short period for the same type of credit product are now counted as a single inquiry.

    How Long Do Inquiries Stay On Credit Reports?

    Hard inquiries will typically stay on a borrower’s credit report for up to two years but will only have an impact on their credit score for about six months.

    While many individuals may worry about the impact that several hard inquiries will have on their credit score, it is not a major determining factor in the calculation of a score.

    Items such as payment history, debt-to-income ratio, and credit utilization play a much larger role in the total calculation.

    How To Minimize The Impact

    Part of exercising responsible credit usage is carefully managing the number of hard inquiries.

    As previously stated, too many hard inquiries can negatively impact a credit score and may also make lenders less likely to approve loan applications. 

    Below are several ways prospective borrowers can minimize the impact of hard credit checks on their credit score.

    ·       Only Apply For Credit When Needed: Applying for unnecessary lines of credit can harm one’s credit score, so only apply when there is a bonafide reason for opening up a new account.

    ·       Check Report For Incorrect Hard Inquiries: Sometimes credit reports can be inaccurate. Ensuring that incorrectly reported hard inquiries are removed from one’s credit report can reverse any negative impact they might have had.

    ·       Be Time Sensitive: Hard inquiries for the same credit product within a short time frame will be counted as a single inquiry. Make sure all loan applications are completed within a set period to avoid them being listed as several inquiries.


    While hard inquiries do not play a major role in determining one’s credit score, they can have a negative impact should too many appear on an individual's report.

    Exercising smart money habits will ensure that an individual's credit score is not negatively impacted due to hard inquiries.