What’s the Difference Between a Hard and Soft Credit Check?

Whenever you apply for a personal loan, a mortgage or rental, a new line of credit, an auto loan, or a credit card, lenders use your credit score to help determine your creditworthiness. Inevitably, you’ll go through many credit checks throughout your lifetime. But not all credit checks are the same.

Soft and hard credit checks show the same information, but they can have different effects on a person’s credit score.

So, what’s the difference between a hard and soft credit check?

What Is a Hard Credit Check?

Hard credit checks most often occur when someone officially applies for something (versus just seeking pre-qualification). Hard credit checks could lower an individual’s credit score.¹

Requests that may trigger a hard credit check include:¹

Loan applications

Credit card applications

Requests for credit limit increases

Applications for new lines of credit

New utility applications

Apartment rental applications

Collection agency skip tracing

A hard credit check may affect your credit score by 5 points or fewer.²

Rate Shopping and Hard Credit Checks¹

When someone is considering a personal loan or new credit card, for example, experiencing too many hard credit checks can ding their credit score. Rate shopping, however, can help a borrower find the best deal without knocking down their score.

Here’s how:

14 days: Some scoring models consider all inquiries within this time frame as one inquiry, limiting the impact to a borrower’s credit score.

Tip: If you’re shopping around for the best rate, concentrate the search to a two-week period.

Some lenders offer pre-qualification, a process that allows borrowers to review potential offers without affecting their credit score.

What Is a Soft Credit Check?

Unlike hard credit checks, soft inquiries typically don’t impact an individual’s credit score.

Situations that might require a soft credit check include:¹

Checking your own credit score

Pre-approved credit offers

Insurance applications

Account reviews by current creditors

Employment applications

Both soft and hard inquiries typically stay on a person’s credit report for 2 years, but FICO scores only consider inquiries from the past 12 months.²

If you’re shopping for a personal loan and want to reduce the impact on your credit, look for lenders that allow you to check your eligibility before applying.

Unlock the Possibilities

See what the possibilities are with no obligation or impact to your credit score. Check your loan options now.

Sources:

1 “What’s the Difference Between a Soft Credit Check and a Hard Credit Check?” June 28, 2021, Forbes Advisor

2 “Credit Checks: What are credit inquiries and how do they affect your FICO® Score?” Oct. 19, 2018, MyFICO

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USA PATRIOT Act Notice: Important Information About Procedures for Opening a New Account

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. What this means for you: When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents.

* Applications submitted on this website may be funded by one of several lenders, including: FinWise Bank, a Utah-chartered bank, Member FDIC; Coastal Community Bank, Member FDIC; and LendingPoint, a licensed lender in certain states. Loan approval is not guaranteed. Actual loan offers and loan amounts, terms, and annual percentage rates ("APR") may vary based upon LendingPoint's proprietary scoring and underwriting system's review of your credit, financial condition, other factors, and supporting documents or information you provide. Origination or other fees up to 10% may apply depending upon your state of residence. Upon final underwriting approval to fund a loan, said funds are often sent via ACH the next non-holiday business day. Loans are offered from $1,000 to $36,500, at rates ranging from 7.99% to 35.99% APR, with terms from 24 to 72 months. Minimum loan amounts apply in Georgia, $3,500; Colorado, $3,001; and Hawaii, $2,000. For a well-qualified customer, a requested loan of $10,000 serviced by LendingPoint over a period of 48 months that has an APR of 26.59% with an origination fee of 10% may have a payment of $340.52 per month. (Actual terms and rate depend on credit history, income, and other factors.) The total amount due under the loan terms provided is $16,345.12 and the disbursal amount is $10,000. In the example provided, the total financed amount is increased to receive the full requested loan amount after the origination fee is deducted. The total amount due is the total amount of the loan you will have paid after you have made all payments as scheduled.

* Applications submitted may be funded by one of several lenders including First Electronics Bank, a Utah-chartered bank, Member FDIC; Coastal Community Bank, Member FDIC; and LendingPoint, a licensed lender in certain states. Loan approval is not guaranteed. Minimum loan amounts apply in Georgia, $3,500; Colorado, $3,001; and Hawaii, $1,500. Upon final underwriting approval to fund a loan, said funds are often available the next non-holiday business day. Actual loan offers and loan amounts, terms and annual percentage rates (“APR”) may vary. Loans are offered from $500 to $10,000 (loan amount maximum based on MCC codes), at rates ranging from 7.99% to 35.99% APR, with terms from 24 to 48 months. For example, for a well-qualified customer, a $5,000 purchase will have a 90-day promotional period with no interest, a 3% fee, and $100 monthly payments. After the promotional period, a remaining balance will be a 24-month term loan, and $263.72 monthly payments with an overall APR of 26.54%.

**Minimum initial transaction of $1,000 in Alabama, Idaho and Iowa.

1. Alimony, child support, or separate maintenance income need not to be revealed if you do not wish to have it considered as a basis for repaying this obligation.

2. The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract); because all or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The federal agency that administers compliance with this law concerning FinWise Bank is the FDIC Consumer Response Center, 1100 Walnut Street, Box #11, Kansas City, MO 64106. The federal agency that administers compliance with this law concerning Coastal Community Bank is the Federal Reserve Consumer Help Center, P.O. Box 1200, Minneapolis, MN 55480. The federal agency that administers compliance with this law for LendingPoint is the Federal Trade Commission, Equal Credit Opportunity, Washington, DC 20580.

Click here to see our current list of state licenses

California residents click here ››

Wisconsin residents click here ››

Ohio residents click here ››

LendingPoint's NMLS #1424139 Visit NMLS Consumer Access

What’s the Difference Between a Hard and Soft Credit Check?

So, what’s the difference between a hard and soft credit check?

What Is a Hard Credit Check?

A hard credit check may affect your credit score by 5 points or fewer.²

Rate Shopping and Hard Credit Checks¹

What Is a Soft Credit Check?

Unlock the Possibilities

Sources:

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