Hard Inquiries vs. Soft Inquiries: What You Need to Know

Not all credit checks are created equal. Understanding the difference between hard and soft inquiries can save you precious credit score points.

What is a Hard Inquiry?

A hard inquiry occurs when a lender checks your credit as part of a lending decision. This happens when you apply for:

• Credit cards
• Mortgages or home loans
• Auto loans
• Personal loans
• Student loans

Hard inquiries can lower your score by 5-10 points and stay on your report for 2 years (though they only impact your score for 12 months).

What is a Soft Inquiry?

Soft inquiries occur when you check your own credit, when employers run background checks, or when credit card companies pre-approve you for offers. Soft inquiries do NOT affect your credit score at all.

Rate Shopping Protection

FICO treats multiple inquiries for the same type of loan (mortgage, auto, student) within a 14-45 day period as a single inquiry. This allows you to shop for the best rates without damaging your score.

How to Minimize Hard Inquiry Impact

1. Only apply for credit when you really need it
2. Use pre-qualification tools (soft inquiries) before applying
3. Do all rate shopping within a short time window
4. Space out credit applications by at least 6 months
5. Dispute unauthorized hard inquiries immediately with OriumAI