Hard credit inquiries happen when you apply for a loan or credit card, while soft credit inquiries typically happen when you — or your employer or landlord — check and verify your credit.
What is a soft credit check also called a soft inquiry or soft pull? When a soft credit check occurs, they don’t always require your approval and can happen at any time. Even if a soft credit pull ends up on your credit report, it won’t cause your credit score to drop as a result of the inquiry. Checking your own credit score will result as a soft inquiry, or when you apply for an apartment, and even when you’ve applied for a job with does a background check on you will have no effect on your credit score.
A hard credit check, also referred as a hard pull or hard inquiry, will impact your credit score. It occurs when you’ve given a company or someone permission to check your credit. For example, a lender permission to check your credit to determine whether you should be approved and your possible terms and interest rate.
Hard credit checks will lower your credit score, but the effect depends on what your overall credit score was when you applied. I you have a good credit score a few hard credit inquiries in a short period of time will experience less of an impact on their credit score than a someone trying to borrow with poor credit who has several hard inquiries.
While your credit score might drop from one hard inquiry, it usually rebounds after a couple of months. Always expect a FICO score decrease of one to five points after a hard inquiry. Even after your score goes back up, hard inquiries can stay on your credit report for two years. When this happens even though it is a small percentage this can flag lenders which may deny you for a new loan.
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