Soft Credit Check vs. Hard Credit Check: What’s the Difference?

Fact checked by Brendan HarknessFact checked by Brendan Harkness

If you’re applying for a new travel rewards card or a new apartment, you may have to undergo a credit check. Whether that credit check impacts your credit score depends on the type of credit inquiry: soft or hard. Hard credit inquiries can affect your credit, but soft credit checks won’t. 

In this breakdown of soft and hard credit checks, learn about their differences, when they occur, and how to protect your credit score.

Key Takeaways

• Credit checks occur when someone, such as a prospective lender, checks your credit reports. 
• Soft credit checks are only for informational purposes and don’t affect your credit score. 
• Hard credit checks occur when you apply for new credit, and they can affect your credit score. 
• Having several hard credit checks in a short period of time can slightly hurt your chances of qualifying for new credit. 
• When rate shopping, limit new credit inquiries to a short window to minimize damage to your credit. 

Soft Credit Check vs. Hard Credit Check: Key Differences

Your credit reports show the credit cards and loans that appear under your name, such as car loans or mortgages. Prospective lenders and others can check your credit file for information on how you’ve handled credit accounts in the past. Credit checks, also known as credit inquiries, have different rules and impacts on your credit.

FICO and VantageScore are the two most popular credit scoring brands. You can check your credit scores through a variety of credit monitoring services.

Soft Credit Check

A soft credit check is performed for informational purposes. It shows what accounts you have open, your payment history and past addresses. 

You may undergo a soft credit check in the following scenarios:

• You check your own credit
• Your bank or credit card company provides a credit score
• You’re applying for a job and the employer performs a credit check
• You’re applying for a new apartment and the landlord requires a background and credit check
• You use a pre-qualification tool to view potential loan or credit card options 
• You apply for home or car insurance and the insurer checks your credit as part of setting your premiums

Soft credit checks show up on your credit reports, but they don’t affect your credit score. Only you can see all of the soft inquiries on your reports, but companies in the same product or industry can see related inquiries. For example, a personal loan lender can see personal loan soft inquiries.

Important

An employer must get your written consent before conducting an employment credit check. This practice is restricted in some states and municipalities, such as New York City.

Hard Credit Check

Lenders usually conduct a hard credit inquiry whenever you apply for new credit. For example:

• You apply for a new credit card or loan
• You finance a new car at a dealership 
• You refinance your student loans
• You request a credit limit increase

Hard credit checks require your written consent (or a digital confirmation), and they give creditors one-time permission to review your credit reports. 

Hard credit inquiries can cause your score to drop by several points; FICO says one hard check will take less than five points off most people’s scores. In general, new credit inquiries impact your credit score for 12 months, but they stay on your reports for two years.

Seeing too many new credit inquiries on your reports can make creditors wary of lending to you, even if you have a high credit score. According to myFICO, those with six or more hard credit inquiries on their credit reports are up to eight times more likely to declare bankruptcy than people with no inquiries, which is why having multiple hard credit inquiries in a short time isn’t a good idea.

Multiple credit inquiries for one type of credit—such as rate shopping for an auto loan—are given more leniency than usual (depending on the credit scoring model your prospective lender is using). With VantageScore, inquiries that occur within a 14-day window are viewed as a single inquiry. FICO works differently; depending on the scoring formula, the window ranges from 14 to 45 days.

How to Dispute Hard Credit Inquiries

Although an unauthorized soft credit check won’t affect your credit, a hard credit check will. If you find an unauthorized inquiry on your credit report, follow these steps to dispute it:

1. Contact the company: Your credit report will list the name of the company that performed the credit inquiry. Contact the company (usually a lender) to find out why they did a credit check; it may be that you authorized a credit check with one lender and it used another company to review your credit.
2. Submit a dispute with the credit bureaus: If the lender can’t explain why they checked or the inquiry was an error, you can dispute it with the major credit bureaus online. You’ll need to file a dispute for each report with a mistake:

• Equifax
• Experian
• TransUnion

Warning

Credit report errors are unfortunately common. According to a 2024 Consumer Reports study, 44% of adults found errors on their credit reports, and 27% of those errors were big enough to impact their credit.

It’s also possible your information was stolen and someone else applied for credit in your name, making this a case of identity theft. Here’s what to do in that case: 

1. File a report with the FTC and police: Report the fraudulent credit application to your local police and the Federal Trade Commission (FTC). 
2. Submit a dispute with the credit bureaus: Once you have report numbers from the police and the FTC, dispute the inquiries with the major credit bureaus online. 
3. Add fraud alerts to your credit reports: Fraud alerts notify creditors to take extra precautions to verify your identity before approving new applications.
4. Consider freezing your credit: If you are a victim of identity theft, protect your credit by freezing your credit reports. Once a credit freeze takes effect (usually within one business day), creditors cannot perform hard credit inquiries, so no one can use your information to take out a new loan or open a new credit card.

Important

Previously, you could request your credit reports from each of the major bureaus only once per year at no charge. However, you can now view your credit reports for free on a weekly basis at AnnualCreditReport.com.

Frequently Asked Questions (FAQs)

Does a Soft Credit Check Lower Your Credit Score?

A soft credit check does not impact your credit score. You can safely use soft credit checks to view potential loan rates or check credit card eligibility without hurting your credit. 

Does Checking My Own Credit Score Result in a Hard Inquiry?

Checking your own credit report and credit score doesn’t involve a hard credit inquiry since you aren’t applying for new credit. You can safely check your credit reports and scores without damaging your credit. Consider using a credit monitoring service to keep tabs on your credit on an ongoing basis.

How Many Points Do You Lose on a Hard Credit Check?

The number of points your credit score will decrease after a hard credit check depends on several factors, including your current credit score, the length and contents of your credit history, and the number of recent inquiries. According to FICO, for most people, a single hard credit inquiry will cause a FICO score to drop by less than five points.

Can You Remove an Unauthorized Hard Inquiry?

If your information has been compromised due to identity theft and you see unauthorized hard credit inquiries on your credit reports, you can dispute those inquiries with the credit bureaus. Each of the three major credit bureaus allows you to dispute issues on your credit reports online:

• Equifax
• Experian
• TransUnion

Can Someone Run Your Credit Without You Knowing About It?

Restrictions on who can run your credit and for what purpose are set by the Fair Credit Reporting Act (FCRA). In general, and aside from identity theft, soft credit inquiries don’t require your permission, while hard credit inquiries do. For example, if your credit card issuer provides you with a credit score, it will repeatedly run your credit every week or month, and it doesn’t need your permission to do so (and this doesn’t hurt your credit). 

Under the FCRA, your credit reports can be accessed—without your knowledge or your consent—if a creditor or individual gets a court order, and during some child support disputes.

The Bottom Line

Not all credit checks affect your credit. While a hard credit check can cause your score to decrease by several points, soft credit checks are harmless. 

To protect your credit, limit new credit inquiries and only apply for a loan or credit card when it’s essential. Once your new account is open, focus on making your payments on time and paying down your balances to improve your credit score. 

Read the original article on Investopedia.