Understanding the Difference Between Hard and Soft Credit Inquiries
Managing your credit begins with understanding the various factors that impact your score, including credit inquiries. Two main types of inquiries— hard inquiries and soft inquiries —serve different purposes and affect your credit score differently. Knowing the distinction between them is essential for maintaining a healthy credit profile. What Are Hard Credit Inquiries? A hard inquiry, also called a hard pull , happens when a lender or creditor checks your credit report as part of their decision-making process. This type of inquiry is common when you apply for: Credit cards Personal or auto loans Mortgages or home equity loans Hard inquiries typically lower your credit score by 5-10 points and stay on your credit report for up to two years. Although a single hard inquiry may have a minimal impact, multiple inquiries in a short period can signal to lenders that you’re in financial distress, potentially making it harder to secure credit. However, credit scoring models li...