Credit Pulls: Hard vs Soft Inquiries

Credit Pulls: Hard vs Soft Inquiries

Knowing how credit inquiries affect you is a big part of being financially healthy. When you apply for a credit card or loan the creditor will “pull” your credit. This is known as a hard inquiry – but there are also soft inquiries, too. Here is what makes them different:

Hard Inquiries:

• Are used after you apply for credit to determine whether or not you qualify.
• Will show up on your credit report and will typically remain there for two years.
• Are commonly used for applications for mortgages, auto loans, credit cards, student loans, personal loans, and apartment rentals.
• Require your consent for companies to pull your report.
• Can lower your score, especially if you have too many pulls in a short amount of time (though pulls in a two-week period for the same type of loan – like a mortgage – are viewed as only one pull).

Soft Inquiries:

• Are commonly used for employment verification, to pre-approve you for credit offers, insurance quotes, or when you are checking on your score and report.
• Show companies exactly what you would like to see if you were to pull your own credit report from Experian, Equifax, or TransUnion.
• Are accessible by companies without your permission – but don’t worry, it doesn’t affect your credit in any way.
• Won’t negatively affect your credit score and won’t appear on your credit report.

By managing your credit inquiries wisely and being mindful of their effects, you can better protect your credit score. Regularly monitoring your credit report, minimizing unnecessary hard inquiries, and staying informed about your credit activity will help you maintain a strong credit profile.

If you need help establishing or fixing credit, MVCU has partnered with GreenPath Financial Wellness to provide free one-on-one counseling.

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