Credit Inquiry – Hard Pull vs. Soft Pull

Have you heard that whenever your credit report gets accessed, your credit score will get lower as well? This is a bit terrifying and unbelievable, right? Well, I’ve got some news for you. It’s PARTLY true. Now, before you start refusing to protect your identity by regularly check your credit score or get your credit report, let me explain.

There are two types of credit inquiries. One is called a “hard inquiry” or “hard pull”. And the other is called a “soft inquiry” or “soft pull”. Only a hard inquiry will cause your credit score to be lowered – based on the credit score formula breakdown.

What’s the Difference Between a Hard Inquiry and Soft Inquiry?

Hard Inquiry/Pull

First, as I mentioned above, a hard inquiry will affect your credit score, while a soft inquiry will not. Hard inquiries are typically well in your control, where you need to provide explicit consent to having someone run it against your social security number. So if you’re applying for a credit card or a loan, you can be sure it’ll be a hard inquiry/pull.

Though one hard inquiry may only affect your score minimally, multiple hard pulls can dramatically cause your score to drop. So make sure you only approve hard pulls once in a while.

Soft Inquiry/Pull

A soft inquiry is usually done without your knowledge, unless you monitor your credit report regularly. Soft inquiries are still visible on your credit report. They just don’t hurt your score.

Employers doing background checks and companies who want to provide you with some credit related offer typically run these. You know that “pre-approved” letters your get? Yep, that company most likely did a soft pull on your before sending out that offer.

And don’t worry; running a credit check on yourself is considered a soft pull. This makes sense because it’s known that securing your identity is extremely important. Credit agencies want you to check your credit report/score regularly. This can help you protect yourself from any mistakes or fraudulent activity.

A Related Story

When I was a freshman in college, I was sucked into applying for a lot of credit cards. I was approved for all the cards I applied for, until maybe my fifth card. After that I started receiving letters that said I was denied because of “too many credit inquiries”. I didn’t think much of why, until now. I was young and only cared about my free t-shirt. A few, I admit, I still use. They keep surprisingly well. If I had known about the ways to improve your credit score, I would have definitely been less inclined to apply for so many at once. Good news is that it didn’t cripple my credit and I’m still in the green of the credit score range.

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