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Soft vs. Hard Credit Check: What You Need to Know to Protect Your Score
- Danielle Burton
- Jul 1
- 16 min read
Updated: 7 days ago
When navigating the credit application process, whether for a mortgage application, an auto loan, or a new credit card, you’re likely to encounter both soft and hard credit inquiries. These credit checks are vital in determining your approval for loans and can directly impact your credit score. Understanding how each type works and how often they occur is essential for anyone looking to manage their credit activity wisely.
Soft credit inquiries often occur during pre -qualification or pre-approval checks. Lenders, employers, or landlords use them to assess your risk level without affecting your score. These inquiries are common when reviewing promotional offers, evaluating rental applications, or monitoring your credit file regularly.
In contrast, hard inquiries occur when you formally apply for credit, such as during mortgage applications, auto financing, or new credit card submissions. Credit bureaus record these inquiries, which may cause credit score drops, particularly when multiple applications are made in a short timeframe. Fortunately, some lenders group similar loan applications if made within a defined period, treating them as a single inquiry.
Your payment habits, frequency of applications, and the state of your credit report all influence your average credit score. While people apply for credit for a variety of reasons, understanding how to time and manage your applications can help you avoid unnecessary damage to your credit health.
In this article, we’ll break down the difference between soft and hard inquiries, explain their impact on your score, and offer practical tips to protect your financial standing. Whether you're working to build your credit or maintain a clean credit report for future approvals, this guide will help you approach the loan process with confidence.
Road Map:
Soft vs. Hard Credit Check: Key Differences Explained
When applying for a loan, credit card application, or rental application, you may encounter different types of credit inquiries—hard credit checks (hard inquiries) and soft credit checks (soft inquiries). Understanding the impact of these checks on your credit file can help you protect your credit rating and make informed financial decisions.
What is a Soft Credit Check?
A soft credit check, also known as a soft pull, is a basic review of your financial history that does not affect your credit impact or lower your credit score increase. It provides a snapshot of your credit accounts, including your payment history, outstanding debts, and credit utilization.
Soft inquiries are often used for informational purposes and commonly occur in situations such as:
✅ Pre-approved offers for credit cards, personal loans, or auto loan applications
✅ Background checks by landlords, employers, or financial institutions
✅ Monitoring your own credit score through credit reporting agencies
Since soft credit pulls are not tied to a formal application for credit, they are not visible to potential lenders and do not impact your credit situation.
What is a Hard Credit Check?
A hard credit check, also known as a credit pull or hard inquiry, occurs when a lender reviews your full credit report to determine whether you qualify for a type of loan, such as a mortgage loan, auto loan application, or personal loan.
Hard inquiries typically happen when you apply for:
✅ Credit cards and personal loans
✅ Auto loan applications and mortgage loans
✅ Rental applications where landlords require a full credit check
Unlike soft inquiries, hard inquiries can have a minor impact on your credit score—usually lowering it by a few points. However, multiple hard inquiries within a short period of time (such as applying for several loans or credit cards) can have a negative impact on your credit rating and signal risk to potential lenders.
Key Differences: Soft vs. Hard Credit Checks
Feature | Soft Credit Check | Hard Credit Check |
Impact on Credit Score | No impact | Can lower your score slightly |
Visible to Lenders | No | Yes |
When It Happens | Pre-approval offers , employer/landlord checks, checking your own score | Application for credit , mortgage, auto loan, credit card |
Approval Required | No | Yes – You must authorize it |
How Long It Stays on Your Report | Not recorded on your credit file | Up to 3 years (Canada) |
Why Does This Matter?
Knowing when a soft vs. hard credit check is performed is essential for managing your financial accounts and maintaining healthy credit habits. If you're applying for a loan, credit card, or rental agreement, be mindful of how hard inquiries can affect your credit impact.
✔ Limit unnecessary hard inquiries to prevent long-term effects on your credit rating.
✔ Use soft credit checks to monitor your credit score and explore pre-approval offers without risk.
✔ Ask lenders whether they perform a hard or soft credit check before applying for new credit.
Understanding the difference between soft credit pulls and hard inquiries is key to protecting your credit score increase and making smarter financial decisions. If you're unsure whether a type of credit inquiry will affect your credit file, always ask before proceeding. Maintaining a strong financial history by making bills on time and avoiding excessive credit pulls will help you build and maintain good credit over time.
How Do Hard Inquiries Affect Your Credit Score?
A hard inquiry (also known as a hard credit check or credit pull) happens when a financial institution, lender, or credit reporting agency reviews your credit file to determine your eligibility for a type of loan or financial account. Whether you're applying for a credit card application, mortgage loan, auto loan application, or rental application, hard inquiries play a role in assessing your creditworthiness. While a single hard inquiry has a minor impact, multiple inquiries in a short period of time can raise concerns for potential lenders and negatively affect your credit rating.
How Much Do Hard Inquiries Lower Your Credit Score?
The effect of a hard credit inquiry varies based on your financial history and overall credit situation, but in general:
✔ A single hard inquiry can lower your credit score by 5 to 10 points.
✔ Multiple hard inquiries within a short time period (excluding rate-shopping inquiries) can signal risk to lenders and make it harder to get approved for new credit accounts.
✔ Hard inquiries stay on your credit report for up to three years in Canada, but their impact on your credit score increase typically fades after 12 months.
Having too many types of credit inquiries in a short span can suggest financial distress and increase the likelihood of loan denials.
When Do Hard Inquiries Happen?
A hard credit check is typically required when you apply for:
✅ Auto loan applications
✅ Mortgage loans
✅ Credit card applications
✅ Personal loans and lines of credit
✅ Some rental applications
✅ Cell phone financing plans
Credit reporting agencies use this information to help lenders determine your ability to manage new credit responsibly. However, too many hard inquiries in a short period of time can raise red flags, making lenders hesitant to approve your application for credit.
Can Multiple Hard Inquiries Hurt Your Score?
Yes, but there’s an important exception: Rate shopping for loans.
If you’re comparing rates for a mortgage loan, auto loan application, or student loan, credit bureaus group multiple inquiries into one, provided they occur within a 14- to 45-day grace period (depending on the credit bureau). This prevents a negative impact on your credit rating when shopping for the best loan terms.
However, applying for multiple credit cards or personal loans in a short time period will not be grouped together and can significantly lower your credit score.
How to Minimize the Impact of Hard Inquiries
To protect your credit file and maintain healthy credit habits, follow these strategies:
✔ Limit new credit applications – Only apply when necessary to avoid unnecessary credit pulls.
✔ Check for pre-approval offers – Many lenders offer pre-approval using a soft credit check, allowing you to see if you qualify without a credit impact.
✔ Be strategic about rate shopping – Apply for auto loans, mortgage loans, or student loans within a short grace period to minimize the effect of multiple types of credit checks.
✔ Monitor your credit report – Regularly checking your financial accounts helps identify unauthorized credit checks and ensures your credit situation remains stable.
While hard credit inquiries are a necessary part of the loan application process, excessive inquiries can negatively affect your credit score increase and limit your ability to secure new financial accounts. Before applying for credit, always ask whether a hard vs. soft credit check will be performed. Making payments on time, limiting unnecessary applications, and seeking financial advice from a trusted financial advisor can help you maintain a strong credit rating and avoid unnecessary setbacks in your financial history.
Do Soft Inquiries Impact Your Credit Report?
A soft inquiry (also known as a soft credit check or soft pull) is a type of credit review that does not impact your credit rating. Unlike a hard credit check, which can have a minor impact on your credit score increase, soft inquiries simply provide a snapshot of your credit file without affecting your financial history or borrowing ability.
Understanding the role of soft credit pulls in your credit situation can help you manage your financial accounts wisely while avoiding unnecessary credit pulls that might have a negative impact on your ability to obtain new credit.
When Do Soft Credit Inquiries Occur?
Soft inquiries happen when a lender, employer, or financial institution reviews your credit file for informational purposes rather than as part of a formal application for credit. Common situations where soft inquiries occur include:
✅ Checking your own credit score – Using a credit reporting agency like Equifax or TransUnion to monitor your credit impact.
✅ Pre-approved offers for credit cards or loans – Lenders use soft inquiries to determine eligibility for a pre-approval offer before sending you an offer.
✅ Employer or landlord background checks – Some employers and landlords review your credit rating as part of the rental application or hiring process.
✅ Existing credit account reviews – Banks or credit card issuers may conduct soft credit checks when evaluating credit limit increases or new financial products.
Since soft inquiries are not tied to an actual loan application, they are not visible to potential lenders and do not affect your ability to secure new credit accounts.
Do Soft Inquiries Affect Your Credit Score?
No! Soft credit inquiries have zero impact on your credit rating or ability to secure a type of loan. Whether you check your score once a month or a lender performs a soft credit pull for a pre-approval offer, your credit score increase remains unaffected.
This is a major advantage when comparing soft vs. hard credit checks—since soft inquiries do not lower your score, you can safely monitor your credit situation as often as needed without concern.
How Can Soft Inquiries Be Useful?
Since soft credit checks do not harm your credit file, they can be a valuable tool for maintaining healthy credit habits and planning your loan application process.
✔ Monitor your own credit health – Regularly checking your financial accounts allows you to track improvements and catch unauthorized credit checks.
✔ See if you pre-qualify for loans or credit cards – Many lenders allow you to verify your eligibility for pre-approved offers before committing to a credit pull.
✔ Stay informed before applying for credit – Knowing your credit standing in advance helps you apply for the right types of loans while avoiding unnecessary hard inquiries.
Soft credit pulls do not affect your credit score increase and are a useful way to monitor your credit rating and explore new financial accounts without risk. If you’re ever uncertain about whether a lender or company will conduct a hard vs. soft credit check, don’t hesitate to ask—understanding the difference can help you avoid negative impacts while making informed financial choices.
Duration of Hard Inquiries on Your Credit Report
A hard inquiry (also known as a hard credit check or credit pull) occurs when a financial institution, lender, or credit reporting agency reviews your credit file to assess your creditworthiness for a loan application process, credit card application, or other financial accounts. While hard inquiries can have a minor impact on your credit rating, they don’t stay on your report forever. Understanding how long they last can help you manage your credit situation and avoid unnecessary negative impact on your financial history.
How Long Do Hard Inquiries Stay on Your Credit Report?
In Canada, hard inquiries remain on your credit report for up to three years, depending on the credit reporting agency:
Equifax retains hard inquiries for up to 3 years.
TransUnion records them for up to 2 years.
However, their effect on your credit score increase typically fades after 12 months. While the type of credit inquiry remains visible on your credit file, lenders place less importance on older hard inquiries over time.
How Much Do Hard Inquiries Affect Your Credit Score?
A single hard credit pull can lower your score by 5 to 10 points, but the actual impact depends on several factors:
✔ Your credit history – If you have fewer inquiries and a strong financial history, the effect is minimal.
✔ The number of recent hard inquiries – Multiple inquiries in a short time period can signal financial distress to potential lenders.
✔ Your overall credit profile – Those with bad credit or shorter credit histories may see a bigger drop.
If you apply for multiple types of loans within a short period of time, lenders may view you as a higher-risk borrower, which can further affect your approval chances.
Do Hard Inquiries Affect Your Credit the Entire Time They’re on Your Report?
No! While a hard credit inquiry remains on your credit file for up to two to three years, it only affects your credit score increase for the first 12 months. After that, its influence on your credit rating diminishes, making it less of a concern for lenders reviewing your financial accounts.
How to Minimize the Impact of Hard Inquiries
To protect your credit situation and maintain healthy credit habits, follow these strategies:
✔ Limit unnecessary credit applications – Only apply for new credit when absolutely necessary to prevent excessive credit pulls.
✔ Check for pre-approval offers – Many lenders offer pre-approval using a soft credit pull, which does not impact your credit file.
✔ Be strategic with rate shopping – When applying for auto loan applications, mortgage loans, or student loans, keep your applications within a 14- to 45-day grace period to ensure they are grouped as a single type of credit check.
✔ Monitor your credit report – Regularly reviewing your financial accounts can help you catch unauthorized credit checks or incorrect types of credit inquiries and dispute them with credit reporting agencies.
Hard inquiries remain on your credit report for two to three years, but their credit impact only lasts about one year. If you’re planning to apply for new credit, understanding how hard vs. soft credit checks affect your financial history can help you maintain a strong credit rating and avoid unnecessary drops. By being strategic with your loan application process, making payments on time, and limiting excessive applications, you can keep your credit file in good standing.
Identifying Whether a Lender Will Perform a Hard or Soft Credit Check
Before applying for a loan, credit card, or any financial product, it’s crucial to know whether the lender will conduct a hard vs. soft credit check. This can help you avoid unnecessary hard inquiries that could impact your credit score.
How to Tell If a Lender Will Do a Hard or Soft Credit Check
Lenders and financial institutions don’t always make it clear whether they’ll perform a hard inquiry (which affects your score) or a soft inquiry (which doesn’t). Here’s how to find out:
✅ Check the lender’s website – Many lenders disclose whether they perform a soft check for pre-approvals or a hard check for full applications in their terms or FAQs.
✅ Ask customer service – If it’s unclear, contact the lender directly and ask: "Will this application result in a hard or soft credit check?"
✅ Look for "pre-approval" or "pre-qualification" options – Most pre-qualification processes use a soft inquiry, meaning it won’t impact your credit score.
✅ Review the application terms – Before submitting an application, read the fine print. If a lender requires your explicit consent for a credit check, it’s likely a hard inquiry.
Common Situations: Hard vs. Soft Credit Check
Scenario | Hard Credit Check | Soft Credit Check |
Checking your own credit score | ❌ No | ✅ Yes |
Pre-approved credit card or loan offers | ❌ No | ✅ Yes |
Applying for a credit card, mortgage, or personal loan | ✅ Yes | ❌ No |
Renting an apartment (varies by landlord) | ✅ Yes (in some cases) | ✅ Yes (if only checking basic credit details) |
Employer background checks | ❌ No | ✅ Yes |
Increasing a credit limit on an existing card | ✅ Yes (depends on the lender) | ✅ Yes (if pre-approved) |
What If I’m Not Sure?
If you’re ever in doubt about whether a lender will perform a hard vs. soft credit check, always ask first before submitting an application. Avoiding unnecessary hard inquiries can help protect your credit score, especially if you're planning to apply for a major loan like a mortgage or car loan in the near future.
Understanding whether a lender will perform a hard or soft credit check can help you avoid surprises and manage your credit score wisely. Always read the fine print, ask questions, and take advantage of soft check pre-approvals before committing to a full application.
Strategies to Minimize the Impact of Hard Credit Inquiries
A hard credit inquiry (or hard credit pull) happens when a lender, financial institution, or credit reporting agency reviews your credit file as part of a loan application process, credit card application, or other financial accounts. While a single hard credit check may only have a minor impact on your credit rating, multiple inquiries in a short time period can create a negative impact, signaling financial distress to potential lenders. Fortunately, there are strategies to reduce the effect of hard vs. soft credit checks on your credit situation and maintain healthy credit habits.
1. Only Apply for Credit When Necessary
Every time you submit a loan application process, a hard inquiry is recorded on your credit file. Multiple credit pulls within a short grace period can lower your score and raise red flags for lenders. To prevent unnecessary credit impact:
✔ Apply only when necessary – Don’t submit multiple applications for credit at once.
✔ Be selective with credit card applications – Applying for several credit cards in a short time period can significantly lower your credit rating.
2. Take Advantage of Soft Credit Checks for Pre-Approvals
Many lenders offer pre-approval offers using soft credit pulls, which do not affect your credit score increase. This allows you to check your eligibility for a type of loan or financial product without committing to a hard credit check. Look for terms such as:
💡 "See if you pre-qualify without impacting your credit."
💡 "Soft credit check only."
By using soft credit inquiries first, you can avoid unnecessary hard credit pulls and reduce the negative impact on your credit file.
3. Be Strategic When Rate Shopping
If you're searching for the best interest rates on a mortgage loan, auto loan application, or student loan, credit bureaus allow multiple hard inquiries to be grouped as one—if done within a specific time period:
✔ FICO scoring models: 14 to 45 days
✔ VantageScore models: 30 days
To ensure that multiple inquiries count as one type of credit check, complete all rate shopping within a short timeframe to protect your credit rating.
4. Request Credit Line Increases Strategically
Increasing your credit limit can improve your credit utilization ratio, which helps boost your credit score increase. However, some credit card issuers conduct a hard credit check when processing credit limit increase requests.
✔ Before requesting a credit limit increase, ask if the lender will use a soft credit pull instead of a hard credit check.
5. Monitor Your Credit Report for Unauthorized Inquiries
Regularly checking your credit file through a credit reporting agency (such as Equifax or TransUnion) can help you detect unauthorized credit checks or fraudulent types of credit inquiries.
✔ If you find an unauthorized hard inquiry, you can dispute it with the credit reporting agencies to have it removed and prevent unnecessary damage to your credit rating.
6. Space Out Applications for New Credit
If you need to apply for multiple types of loans or financial accounts, try to spread out applications over time instead of applying for everything at once. This prevents multiple hard credit inquiries from lowering your credit score increase at the same time.
✔ Avoid multiple auto loan applications or credit card applications within the same time period to minimize your credit impact.
While hard credit inquiries are a necessary part of applying for credit accounts, they don’t have to harm your credit score if managed properly. By using soft credit checks for pre-approvals, being strategic about rate shopping, and limiting unnecessary applications, you can protect your credit rating while still accessing the financial accounts and types of loans you need. Always monitor your financial history, make payments on time, and consult a financial advisor if needed to maintain healthy credit habits.
Conclusion: Protect Your Credit Score by Understanding Hard vs. Soft Inquiries
Understanding the difference between hard and soft credit checks is essential for protecting your credit score and wisely navigating the credit application process. Soft inquiries, often used for pre-approval offers, let you explore loan options, check your credit file, and evaluate your risk level without impacting your score. This makes them a valuable tool for managing your credit activity and planning ahead before submitting formal applications.
On the other hand, hard inquiries are triggered during official credit applications, such as mortgage applications or auto loans. They can lead to credit score drops, especially if multiple checks occur in a short period. While necessary for obtaining approval for loans, they should be timed carefully to minimize their impact on your average credit score.
To maintain a clean credit report and support long-term credit health, adopt strong payment habits, avoid applying for credit for a variety of reasons, and monitor your credit file on a regular basis. Using pre - approval and pre - qualification tools that rely on soft credit pulls allows you to assess your eligibility and compare offers without triggering unnecessary inquiries.
Before applying, always ask if the lender will perform a soft or hard check. This simple step can help protect your credit and reduce avoidable impacts. By being intentional with applications and consistently paying bills on time, you’ll safeguard your credit standing and build a solid financial future.
FAQ: Hard vs. Soft Credit Checks
What is the main difference between a hard and soft credit check?
A soft credit check does not impact your credit score and is typically used for pre-approvals, employer background checks, or checking your own credit. A hard credit check affects your credit score and happens when you apply for a loan, credit card, or other financial product.
Do soft credit checks appear on my credit report?
Soft inquiries are recorded on your credit file but are only visible to you—lenders cannot see them, and they do not impact your ability to get approved for credit.
How much does a hard inquiry lower my credit score?
A single hard inquiry can lower your score by 5 to 10 points, but the effect is usually temporary. However, multiple hard inquiries in a short period can signal risk to lenders and may have a bigger impact.
How long do hard inquiries stay on my credit report?
Hard inquiries remain on your credit report for up to three years (Equifax) or two years (TransUnion) in Canada. However, they typically only affect your credit score for 12 months.
Can I remove a hard inquiry from my credit report?
You cannot remove a legitimate hard inquiry, but if you find one that was done without your authorization, you can dispute it with the credit bureau and have it removed.
Will shopping for a mortgage or auto loan hurt my credit score?
If you apply for multiple mortgage, auto loan, or student loan quotes within a 14- to 45-day window, credit bureaus will group them as one inquiry, minimizing the impact on your score.
Can I get pre-approved for a credit card or loan without a hard inquiry?
Yes! Many lenders offer pre-approvals using a soft credit check, which does not impact your score. Always check if pre-qualification is available before submitting a full application.
How can I minimize the impact of hard inquiries on my credit score?
Only apply for credit when necessary.
Use soft inquiries for pre-approvals whenever possible.
Complete rate shopping for loans within a short timeframe to group hard inquiries together.
Monitor your credit report for unauthorized hard inquiries.
Do employers or landlords run hard or soft credit checks?
Most employers and landlords use soft credit checks, meaning they won’t impact your credit score. However, some landlords may perform a hard inquiry—always ask in advance.
Should I worry about checking my own credit score?
No! Checking your own credit score through a credit bureau or financial institution is a soft inquiry and will not affect your credit score. It’s a smart way to stay on top of your financial health.
Important Note: This article and its resources are purely for informational use. They do not reflect the offerings of specific companies or lenders. Our goal is to provide knowledge and insights for better financial decision-making. We recommend conducting in-depth research and seeking professional advice before making any financial decisions. SafeLend Canada, while not a lender, collaborates with various lenders to assist clients in refinancing their auto loans.
