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Soft Credit Check vs. Hard Credit Check

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soft credit cardIf you’ve done enough research about credit scores, you’ve probably heard the term “soft credit check” and “hard credit check.” They’re sometimes referred to as “soft pulls” or “hard pulls,” but the terms mean the same thing. A soft credit check is any check of your credit score or report that doesn’t affect your score.

It’s soft because it doesn’t hurt, things that hurt are hard. Hard credit checks can, and usually do, hurt your credit score. (OK, I don’t know why it’s called a soft check vs. a hard check, I just made that “hard things hurt” bit up)

Soft Credit Checks

The two most common soft credit checks are the ones that you initiate yourself, whenever you request your own credit report or score, and ones that are done on your behalf to establish your identity. Have you ever tried to open an account somewhere and been asked some questions about yourself, such as the name of a street you formerly lived on? Or names of former employers? Those are identity questions from a credit report. Some less common soft credit checks include those from financial companies looking to pre-approve you for an offer, such as a credit card or a refinance offer.

When someone else requests your credit report, they won’t see these soft credit checks. This makes sense because you shouldn’t be penalized for being financial responsible and reviewing your credit report. You also shouldn’t be penalized whenever a credit card company pulls your report to send you yet another offer in the mail (incidentally, you can opt out of these using OptOutPrescreen)

Hard Credit Checks

Hard credit checks hurt. These are when you give a lender or company permission to request your report as part of a lending decision. When you fill out a credit card application, that will result in a hard credit inquiry. When you shop for mortgage rates, where you provide information and are getting a specific rate, that’s another hard credit inquiry. How many points it’ll cost you will depend on your current credit score but it’s usually in the single digits. There are a few unlikely places where you will take a hard inquiry hit like when you get a new cell phone or look to rent an apartment (since they are lending you services ahead of payment), but usually you’ll know because you initiated it.

Since soft credit checks don’t appear on your report when others look at it, they have no lingering effects. It’s generally believed that aard credit checks will hurt for six months and then disappear after a couple years.

Finally, while your credit score is important, don’t obsess over it. Knowing the difference between soft and hard credit checks is important whenever you are thinking about big lending events, like a car or mortgage, but you shouldn’t worry too much on a daily basis. That said, keep those checks to a minimum and you’ll keep that score healthy.

(Photo: stevendepolo)

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6 Responses to “Soft Credit Check vs. Hard Credit Check”

  1. Shorebreak says:

    When shopping for a vehicle get pre-approved for a loan. Otherwise the dealer may cause a hard credit check on your report by requesting you fill out a credit application and submitting a loan approval application through their financing source. This can occur numerous times, if the dealer is ‘shopping’ for the best rate for you.

  2. freeby50 says:

    One point : Generally if you are loan shopping and apply for multiple loans within a short period you will only get hit negatively once. The credit bureaus know that people will logically shop for rates so they aren’t going to ding you 10 times if you get quotes from 10 banks in a short period. So don’t be afraid of shopping for rates on loans thinking that every application will hurt your score, it shouldn’t. However, if you apply for a new loan once a month every month then that will hurt your score every time.

    • yourPFpro says:

      Good point. I just wrote a post last week about this very topic and a few ways to maintain your credit score.

      If you are able to boost up some of your other areas, such as credit limit and credit history, opening new accounts will barely affect your score. This multiple inquiry rule applies to mortgages, auto and student loans, but does not apply to credit cards as i found out :)

  3. govenar says:

    Another unlikely place that sometimes does hard credit checks: banks when opening a checking account (a lot don’t, but some do)

  4. Mathew Coan says:

    Great article. Some people obsess over their credit score and run a credit check too many times and dont realize that they are just hurting themselves. I think the 3 free credit checks that you are allowed to get year is perfect. This way you can monitor your credit for fraudulent activity and its not too many credit checks to hurt your score.


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