What is a soft inquiry?
Soft inquiries (also known as “soft pulls”) typically occur when a person or company checks your credit as part of a background check. This may occur, for example, when a credit card issuer checks your credit without your permission to see if you qualify for certain credit card offers. Your employer might also run a soft inquiry before hiring you.
Unlike hard inquiries, soft inquiries won’t affect your credit scores. (They may or may not be recorded in your credit reports, depending on the credit bureau.) Since soft inquiries aren’t connected to a specific application for new credit, they’re only visible to you when you view your credit reports.Common Question
Will checking my own credit scores result in a hard inquiry?
Yes it can. Even though this is reported as a soft inquiry, it may not lower your credit score, however, some bureaus report “excessive soft pulls” and will decline as they feel you are looking and being turned down...SO CAUTION on how many soft pills you do. You can check your VantageScore 3.0 credit scores from two major credit bureaus, TransUnion and Equifax, for free at creditkarma.
Examples of hard and soft credit inquiries
The difference between a hard and soft inquiry generally boils down to whether you gave the lender permission to check your credit. If you did, it may be reported as a hard inquiry. If you didn’t, it should be reported as a soft inquiry, again, many soft pulls can cause a lender to decline your application.
Let’s look at some examples of when a hard inquiry or a soft inquiry might be placed on your credit reports. Note: The following lists are not exhaustive and should be treated as a general guide.
Common hard inquiries
- Mortgage applications
- Auto loan applications
- Credit card applications
- Student loan applications
- Personal loan applications
- Apartment rental applications
Common soft inquiries
- Checking your credit scores
- “Pre-qualified” credit card offers
- “Pre-qualified” insurance quotes
- Employment verification (i.e. background check)
Keep in mind, there are other types of credit checks that could show up as either a hard or soft inquiry. For example, utility, cable, internet and cellphone providers will often check your credit.
If you’re unsure how a particular inquiry will be classified, ask the company, credit card issuer or financial institution involved to distinguish whether it’s a hard or soft credit inquiry.
How to dispute hard credit inquiries
We recommend checking your credit reports often. If you spot any errors, such as a hard inquiry that occurred without your permission, consider disputing it with the credit bureau. You may also contact the Consumer Financial Protection Bureau (CFPB) for further assistance.
This could be a sign of identity theft according to Experian, one of the three major credit bureaus. At the very least, you’ll want to look into it and understand what’s going on.
Keep in mind, you can only dispute hard inquiries that occur without your permission. If you’ve authorized a hard inquiry, it generally takes two years to fall off your credit reports.How to dispute an error on your credit report
How to minimize the impact of hard credit inquiries
When you’re buying a home or car, don’t let a fear of racking up multiple hard inquiries stop you from shopping for the lowest interest rates.
FICO gives you a 30-day grace period before certain loan inquiries are reflected in your FICO® credit scores. And FICO may record multiple inquires for the same type of loan as a single inquiry as long as they’re made within a certain window. For FICO scores calculated from older versions of the scoring formula, this window is 14 days; for FICO scores calculated from the newest versions of the scoring formula, it’s 45 days.
Similarly, the VantageScore model gives you a rolling two-week window to shop for the best interest rates for certain loans. “That way, they only impact your credit score once,” the company says.
Your credit scores play a big role in your financial well-being. Before applying for credit, take time to build your credit scores. With stronger credit, you may improve your chances of being approved for the financial products you want at the best possible terms and rates.
To help you keep track of hard inquiries that may influence your credit scores, check your credit reports from TransUnion and Equifax . While one hard inquiry may knock a few points off your scores, multiple inquiries in a short amount of time may cause more damage.
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