Soft vs. Hard Credit Checks: How Each One Affects Your Credit Scores

Do your credit scores drop when you pull your own credit reports?

Unfortunately, many people are confused about this topic. But the truth is, pulling your own credit reports doesn’t hurt your credit scores at all. In fact, pulling your own credit information, which is considered a “soft pull” or a “soft inquiry,” is an essential way to find errors and make improvements to your credit.

With that said, a “hard” credit pull can definitely hurt your credit scores. Here’s what you need to know about the difference between a soft and a hard credit pull, and how each one impacts your scores.

What is a soft credit pull and how does it impact your scores?

A soft inquiry, or a soft credit pull, happens when your credit reports are pulled for informational purposes. This includes:

• When you pull your own credit reports
• When creditors or insurers review your credit to see if you qualify for unsolicited offers
• When an NFCC-certified credit counselor pulls your credit reports
• When potential employers or landlords check your credit history

These pulls are considered “soft,” because they don’t involve you applying for new debt. In other words, they don’t necessarily reflect any changes to your debt situation. 

While soft inquiries do appear on your credit reports for two years, they have no impact on your scores whatsoever.

What is a hard credit pull and how much does it hurt your scores?

A hard inquiry, or hard credit pull, happens when you apply for new credit. This includes applications for the following:

• Credit cards
• Lines of credit
• Loans of any kind

According to FICO, the company that invented the credit score, each hard inquiry can cost you up to four points from your credit scores. One single application for new credit is likely to have little impact, but if you make lots of applications in a short period of time, each hard inquiry can result in a bigger hit. 

When a hard inquiry shows up on your credit reports, it will stay there for two years. However, you gain back the points over the course of just one year.

Can you reduce the impact of hard inquiries?

Each hard inquiry has minimal impact on your credit scores. For example, one hard inquiry might cost you two points, while one missed loan payment can cost you as much as 100 points. 

With that said, there are still ways you can minimize the impact of hard inquiries. The main way to do this is by taking advantage of the “rate-shopping window.” According to FICO, if you make multiple applications for one type of credit (such as a car loan) within a 14-day window, the applications will only be calculated in your credit scores as one hard inquiry.

With that in mind, it’s best to avoid applying for a new debt account unless you are truly ready to shop around and find the best product. 

How should you approach hard inquiries in the future?

If you’re working to improve your credit scores, soft and hard inquiries should not be your main concern. There are other debt-related factors that have a much heavier weight in your credit scores than hard inquiries. In fact, hard inquiries only account for 10% of your credit score calculation while payment history accounts for 35% and credit utilization makes up 30%.

However, there are still some best practices and facts to keep in mind when it comes to hard inquiries:

• Avoid hard inquiries until you’re ready to shop around for the best rates on a new credit card or loan.
• Always choose soft inquiries over hard inquiries if the creditor gives you this option.
• Do your “rate shopping” within a 14-day period to limit credit score damage.
• If a hard inquiry on your credit reports is accurate, there’s no way to get it removed before the two-year mark.

All in all, a hard credit inquiry isn’t the end of the world for your credit scores. But if you want to regain points after several hard inquiries, be sure to make all of your debt payments on time and keep your credit card balances to a minimum. For more personalized tips on how to gain points, can reach out to an NFCC-certified credit counselor.

Frequently asked questions (FAQs)

What’s the best way to pull your credit reports?

The best site you can use to pull your credit reports is AnnualCreditReport.com. This is the only federally authorized site, and it’s completely free to pull all three of your credit reports each week.

How many points does your credit score drop with a hard inquiry?

Most hard inquiries cost you less than five points off your credit scores.

How long does it take for hard inquiries to fall off of your credit reports?

Hard inquiries appear on your credit reports for two years, but they only impact your credit scores for the first year.