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What’s the difference between hard and soft credit checks — and why does it matter?

Did you know that there are two kinds of credit checks? Whenever you apply for a loan, a credit card, an apartment lease or even a job, the corresponding lender or company usually performs a credit check, or inquiry, by requesting your credit information from one of the three credit bureaus.

A credit inquiry can either be a soft inquiry or a hard inquiry. Understanding how these two types of credit checks are different, and how and when they’re used, can be helpful whenever you borrow money, apply for a job, request an insurance quote or even check your own credit report

What is a credit check?

“When a lender or other company performs a credit check, or inquiry, they see your full credit report that shows things like your total debts, payment history, what types of accounts you have, your balances and how quickly you pay your bills,” explains Bill Gandolfo, consumer lending product manager, Commerce Bank. “They look at your loans and how close you are to your limits and use that information to decide whether to loan you money, and if so, how much to loan you.”

What is a hard credit check versus a soft credit check?

“Hard credit checks require your permission and usually occur when applying for a loan,” explains Gandolfo. “Since a hard credit check is tied to a specific credit application, it’s noted as an activity in your credit report and can impact your credit score.” Common scenarios that would involve a hard credit inquiry include when you apply for a home, auto, student or personal loan, a credit card or a line of credit.

Soft credit checks don’t impact your credit score, and they don’t require your permission. “Soft credit checks are primarily used to send you marketing messages or prequalify you for a loan or credit card. Many financial companies are using them for marketing campaigns,” says Gandolfo. He also notes that you might see soft inquiries appear on your credit report, but they have no impact on your credit score since they’re not tied to a lending decision.

“Soft credit checks happen frequently, and in most cases, the companies performing the soft check don’t need that much data. They are just looking for information to learn about you, such as employment verification,” he adds. Other common scenarios involving soft credit checks can include insurance companies who may use the information to give you a policy quote, or even a self-check, such as when you check your own credit report for accuracy.

There are some situations where either a hard or a soft credit check could occur, like applying for an apartment lease or setting up new utility or mobile phone accounts.

How does a credit check impact my credit score?

A soft credit check doesn’t impact your credit score. Only a hard credit check, which requires your permission, can impact your credit score. However, says Gandolfo, “A hard credit check may not impact your score as much as you might think. Other factors likely have more of an impact on your credit score, like the amount of balances you’re carrying, how close you are to your credit limits and how timely your payments are.”

Here are a few other credit check facts to be aware of:

  • A hard credit inquiry can stay on your credit report for up to two years.
  • Applying for multiple loans or credit cards in a short amount of time will trigger multiple hard credit checks. It may look like you have trouble managing money and may negatively impact your credit score. “Try to avoid multiple hard inquiries in a short amount of time for different types of borrowing,” says Gandolfo.
  • Rate shopping applications are treated as one hard inquiry instead of multiple ones if the inquiries are made within a short period of time. “If you’re shopping for a particular type of loan, like a house or a car, it won’t matter as much as if you’re applying for multiple credit cards or loans,” says Gandolfo.
  • You can dispute a hard inquiry on your credit report that you don’t recognize or didn’t authorize.

Before you apply to borrow money, for whatever reason, it’s a good idea to prepare yourself for a hard credit inquiry by reviewing your credit report for accuracy. You can request your credit report annually from each of the three credit bureaus at no cost at

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