Credit can be a very fragile thing and can be affected differently depending on who looks at it and why. When someone looks at your credit, it is referred to as a credit “inquiry”, “check”, or “pull”. This terminology could apply to anyone – a lender, potential employer, or even yourself. The difference lies in whether a credit check is a hard inquiry or a soft inquiry. These are very different, and as an informed consumer or someone building credit as a teen, it’s important that you know the difference.

What is a Hard Credit Inquiry?

A hard credit inquiry is typically used to make lending decisions. Just the word “hard” makes it sound a bit scary doesn’t it? Well, you guessed it – this is the one that affects your credit. 


But don’t worry, that’s just a necessary part of credit building. When you go to apply for financing like an auto loan or a home mortgage, the lender will put a hard inquiry on your credit report. When you apply for a credit card at a store, bank, or credit union, it will also result in a hard inquiry.

What is a Soft Credit Inquiry?

A soft inquiry does not impact your credit score. The most common use for soft credit inquiries is for background checks. These credit pulls do not have any sort of lending decision relying on them. 


What type of inquiry is it when you check your own credit? Thankfully, this is a soft pull. You don’t want to be penalized just for seeing how your credit is doing, right? You can see your credit report for free once every 12 months from each of the three credit bureaus. You can also get updates on your score, as well as advice on how to improve it from resources such as Credit Karma.

How do Credit Checks Affect My Credit?

So we know that only hard inquiries affect your credit score. These usually only lower your score slightly, by less than five points on average according to MyFICO. But this shouldn’t be of any concern – just think about it. 


Let’s say you’re trying to get approved for an auto loan. Over the life of that loan, you’ll have the opportunity to boost your credit a lot. In comparison, the hard inquiry is no big deal! This goes with any loan or credit card you’re applying for. If you get approved, you’ll have an opportunity to make up for that small credit score drop from a hard inquiry and more.


How long hard inquiries will affect your credit score can vary. Typically, hard credit checks can be seen on credit reports for 24 months, but stop affecting your score after 12 months, if they do at all according to NerdWallet.

Should I Avoid Multiple Hard Credit Checks?

Every lender will view your recent credit activity differently, but it’s always good to limit the volume of hard inquiries that you make at once. It also depends on what type of financing or credit you’re applying for. Having too many hard pulls on your credit will negatively impact your approval chances, but much less so if they are the same type of inquiry, according to MyFICO. This is because it’s assumed that you are in a window of “rate-shopping” which is typically allowed for 30 days.


For instance, if you are applying for auto financing you may want to shop around at a few different banks or dealerships to secure the best auto loan rates possible. This should not negatively affect your score any more than one single inquiry would within 30 days of the first check. 


However, if you were to apply for an auto loan, a home mortgage, and a new credit card all within 30 days – this is not rate shopping, as the inquiries are totally different. These all would have a negative effect on your credit.

Are Hard Credit Pulls Always a Bad Thing?

All of this kind of makes hard credit inquiries sound like something you want to avoid at all costs – well, not really. They’re completely inevitable in the process of applying for financing or credit. They’re expected, and a necessity in credit building. Some people try to get around exposing their true credit by using a CPN (Credit Privacy Number) in place of their SSN; however, you could be throwing yourself into a world of fraud and illegal activity by doing so.


If you notice that there is a hard inquiry on your credit report that you didn’t make, you’ll want to get this removed by writing to the creditor. You should be reviewing your credit at least once a year and correcting any credit report inaccuracies. 


Just keep in mind that these dings to your credit score will only be a few points. And they’re only temporary, as long as you’re smart about spending within your budget and can make all payments on time. In any financing situation, you should come out in a better credit position than when you started.