Credit 101: Soft & Hard Inquiries

May 5, 2011

It’s important to know the difference between soft and hard inquiries for two reasons: a soft inquiry will not affect your credit score while a hard inquiry will, and sometimes it’s unclear what type of inquiry a company or lender will initiate. So let’s find out what these inquiries mean for you and how they can affect your credit.

Soft & Hard Inquiries Defined

soft inquiry occurs when someone checks your credit on your behalf, such as when your employer does a background check to assess financial risk or when a bank or lender verifies your identity. A soft inquiry also occurs when creditors “pre-approve” you for a loan or credit card offer or when you view your credit score on Credit Karma, which doesn’t affect your score and is always free.

A soft inquiry will never hurt your credit score, whether it’s a lender, employer, creditor, or you requesting to view your credit.

hard inquiry is when a lender, credit card issuer, or other financial institution requests a credit check in order to decide whether or not to extend a line of credit to you, such as a credit card or auto loan. Each hard inquiry usually drops your credit score by a few points and will lessen in impact after several months, but it will remain on your credit report for two years. For this reason, applying for lots of credit at one time can significantly decrease your credit score for a period of time.

Sometimes it’s difficult to figure out which financial actions could result in a soft or hard inquiries. For some actions, like applying for a mortgage, you’ll always be hit with a hard inquiry. For other actions, it depends on the company. For instance, when you rent a car, submit an apartment rental application, or open a TV or high-speed internet account, you may be initiating a soft or hard inquiry.

For a quick guide, here’s a reference chart of actions that are categorized as soft or hard inquiries, and those that vary depending on the financial institution.

Hard Inquiry

  • Credit Card
  • Mortgage
  • Auto loan
  • Student loan
  • Bank loan


  •  Apartment rental applications
  • Checking/ savings/ money market account
  • Wireless phone account
  • Applying at a credit union
  • Car rental
  • Online stock brokerages
  • TV/ high-speed internet account

Soft Inquiry

  • Background check, such as credit checks by an employer
  • “Pre-approved offers” for credit cards or loans
  • Requests to see own credit score, like on Credit Karma
  • Identity verification by banks, lenders, companies

Remember, you can always ask the company or financial institution which type of inquiry they’ll initiate on your credit before you approve it.

Bethy Hardeman is the Social Media Manager and Writer at Credit Karma.