How Credit Inquiries Impact Your Credit Score: Hard Pulls vs. Soft Pulls
Your credit score plays a critical role in your financial life—determining everything from whether you qualify for a loan to the interest rate you’ll pay. One often misunderstood factor affecting your credit score is the credit inquiry. Let’s break down what a credit inquiry is, the two main types (hard and soft pulls), and how they impact your credit score
Types of Credit Inquiries
Soft Inquiries or Soft Pulls
A soft inquiry is a credit check that does not affect your credit score. These checks are often done for informational or promotional reasons, not in connection with a new application for credit.
Common Examples of Soft Inquiries:
- You check your own credit report or score.
- A lender pre-approves you for a credit card offer
- An employer runs a background check (with your permission).
- A current lender reviews your account for ongoing account management.
Hard Inquires or Hard Pulls
A hard inquiry occurs when a lender checks your credit report to evaluate your creditworthiness as part of a lending decision—usually when you apply for a new credit card, auto loan, mortgage, or other financing.
Common Examples of Hard Inquiries:
- Applying for a mortgage or home equity loan
- Requesting a new credit card
- Leasing a car
- Applying for a personal loan or line of credit
Hard pulls can temporarily reduce your credit score by 5–10 points per inquiry. The impact is usually small and short-lived but can add up if you apply for multiple credit accounts in a short period.
How Long Inquiries Stay On Your Report
Hard inquiries stay on your credit report for 2 years, but only affect your credit score for the first 12 months.
Soft inquiries may be visible to you but are not shown to lenders and do not affect your score.
Multiple Inquiries due to Rate Shopping
If you’re shopping around for a mortgage, auto loan, or student loan, multiple inquiries within a short window (typically 14 to 45 days depending on the scoring model) are treated as a single inquiry. This is known as rate shopping, and it’s designed to encourage consumers to seek the best loan terms without being penalized for each lender’s check.
Prequalification Stage – Usually a Soft Pull
In the early stages, such as getting prequalified, many lenders perform a soft inquiry to give you an estimate of what you may qualify for. This check does not affect your credit score and is typically based on information you provide verbally or through an online form.
Preapproval and Full Application – Hard Pull
Once you move into the preapproval phase or submit a formal mortgage application, the lender will run a hard inquiry. This is necessary for them to access your full credit report and score in order to evaluate your eligibility and offer terms. This hard pull does affect your credit score slightly.