Hard vs. Soft Credit Inquiries: What Affects Your Score and What Doesn't
Checking your own credit doesn't hurt your score. Applying for new credit usually creates a hard inquiry that can. Here is the difference and how rate shopping is treated.
Every time someone checks your credit, it's recorded as an inquiry. Some inquiries can affect your credit score; most don't. The difference is whether you're applying for new credit.
Soft inquiries
Soft inquiries happen when your credit is checked but you're not applying for credit. Examples:
- checking your own credit report or score;
- prequalified or preapproved offers you didn't request;
- account reviews by your existing lenders;
- some background checks for employment, with your permission;
- some insurance quotes.
Soft inquiries don't affect your credit score. They may appear on your own copy of your report, but lenders typically don't see them.
Hard inquiries
Hard inquiries happen when you apply for credit and the lender checks your report to make a decision. Examples:
- credit card applications;
- mortgage, auto, and personal loan applications;
- some apartment rental applications;
- some requests for a credit limit increase.
A hard inquiry can lower your score slightly for a period of time and stays on your report for about two years, though its effect on scoring typically fades sooner. Several hard inquiries in a short time can signal risk to lenders.
Rate shopping
Scoring models recognize that people compare offers for certain types of loans. Multiple inquiries for mortgages, auto loans, and student loans within a short window are generally treated as a single inquiry for scoring purposes. The length of the window depends on the scoring model. Credit card applications don't get this treatment; each one generally counts.
So when shopping for a mortgage or car loan, try to do it within a concentrated period.
Prequalification vs. application
Many lenders offer prequalification using a soft inquiry, which can show likely rates without affecting your score. A full application usually triggers a hard inquiry. Ask the lender which kind of check they're doing.
Unauthorized hard inquiries
If you see a hard inquiry you don't recognize, it could indicate an application made in your name. You can dispute it with the credit bureau and, if identity theft is suspected, consider a credit freeze or fraud alert. You're entitled to free credit reports from the nationwide bureaus, and checking them regularly is a soft inquiry.
The takeaway
Checking your own credit never hurts your score. Applying for new credit usually creates a hard inquiry, which has a small, temporary effect. Shop for mortgages and auto loans within a short window, use prequalification where available, and watch your reports for inquiries you didn't authorize.
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