What Does A Soft Inquiry Mean?

A soft inquiry, often referred to as a soft credit pull or a soft credit check, is a procedure for checking a borrower’s credit report. A soft inquiry on your own credit report can also be handled on your own if checking your score is relevant. In official cases, authorized companies that issue credit cards or lend have the right to check your credit history so that they may send you pre-approved offers.

Does A Soft Inquiry Affect Your Credit Score?

One thing that must be made especially is that a soft inquiry never affects your credit score. The reason is that this process does not get linked to a fixed application for credit. 

How Does A Soft Inquiry Work?

Simply checking a credit report is considered a soft inquiry. The distinction of a soft pull is that there is no submission of a new application for credit. What makes soft inquiries easy to handle is that they do not affect the credit scores.

What Does A Hard Inquiry Mean?

A hard inquiry is a process that must be carried out to know a borrower’s credit score, see their credit report and review their history. The hard check remains on the credit report and what makes a hard pull distinct is that it causes the credit scores to experience a temporary decline.

Does A Hard Inquiry Affect A Credit Score?

Hard inquiries undeniably affect a borrower’s credit score. Credit scores undergo a slightly decrease when passed through the hard pull. This is because a hard pull is attached to a specific application for credit.

How Do Hard Inquiries Work?

Whenever you apply for any loan or credit card, the issuing authority will ask you to conduct a hard inquiry. A hard pull is mandatory to check the credit report and score for approval purposes. Accordingly, a hard pull temporarily affects a credit score. Hard pulls will remain on the credit report for almost two years. Luckily, their impact on the credit score is short term. Statistics reveal that there will be an approximate decrease of five to ten points after a hard inquiry. The key is not to apply for too many different forms of credit simultaneously to minimize the impact.

Is A Hard Inquiry Similar To A Soft Pull?

Some big  differences exist between soft and hard inquiries. A few of the important variations are detailed below:

• A soft inquiry never affects the credit score. On the contrary, a hard pull negatively affects the credit score temporarily.
• There are no marks of the soft inquiry on the credit report. Conversely, a hard pull leaves a temporary mark on the credit report.
• A soft inquiry has no link with any application for new credit. A hard pull is attached to a request for new credit.

When Does A Soft Inquiry Occur?

The following list highlights circumstances when a soft credit check occurs:

• When a borrower is checking their own credit
• When any existing creditors check a borrower’s credit
• If you apply for pre-approval for an offer
• An authorized company makes sure that you are eligible for an offer by checking your credit

When Does A Hard Inquiry Occur?

In the following situations, a hard credit check is conducted:

• A company or an institution checks your credit after you apply for financing
• You apply for a loan
• You apply for a new credit card

What Are Some Examples Of Soft Inquiries?

• You check your credit score
• Pre-approval for credit card deals
• Pre-approval for insurance deals
• A company verifies a candidate’s background

What Are Some Examples Of Hard Inquiries?

• Applications for a mortgage
• Credit card applications
• Applications for a personal loan
• Application for renting an apartment

Is It Worth Worrying About A  Soft Inquiry?

When it comes to credit checks, borrowers should not worry about soft inquiries. Soft pulls never leave an effect on your credit scores and in addition, these inquiries are not displayed on credit reports. Even multiple soft pulls leave no impact.

Is It Worth Worrying About A Hard Inquiry?

To some extent, worrying about the impact of hard inquiries is reasonable. Multiple hard pulls within a short span of time can cause a measurable decline in credit scores. Moreover, hard pulls are displayed on credit reports. Several hard pulls mentioned in your credit report may lead to a decline in trust from more watchful lenders.

Conclusion

There are visible differences between soft and hard inquiries, although you should worry less about soft pulls given their absence of an impact on your credit report. Hard pulls do leave a mark, but their impact can be mitigated if applications for new credit are limited. 

If you are looking for ways to build credit, then we recommend you to avoid multiple hard inquiries to ensure your score can continue rising. Still, don’t feel limited to the number of times you can conduct a soft pull on your credit if you’re working to rebuild and repair credit or see where you stand.