hard and soft credit inquiries Your credit is the key to your financial health, and knowing your credit standing is vital in this day and age, as good credit is often required for renting an apartment, buying a car and even getting a cell phone. In order to get approved for these types of things, a lender or company will first check your credit reports to determine if you are financially responsible. Whenever your credit scores are checked or your credit reports are requested, a credit inquiry is made and recorded. As you are probably aware, there are two different types of credit inquiries: hard and soft. But what exactly do these inquiries mean for you and your credit scores? We break down the difference in the two and explain which one can impact your credit scores.

What is a hard credit inquiry?

A hard credit inquiry, also referred to as a hard pull, occurs whenever a third party pulls your credit reports when you are requesting or applying for a new line of credit. Mortgages, credit cards, auto loans and student loans are examples of credit that would require a hard inquiry. When you apply for one of these, the lender (e.g., the credit card issuer or bank) will request your credit reports to check your current standing in order to determine your creditworthiness, or how likely you are to default on the loan. When the lender requests your credit report from a credit bureau, that bureau will record the request, and the credit pull (or hard inquiry) will stay on your credit reports for two years. For example, if you apply for a Chase credit card, your credit reports will show a credit inquiry from Chase — regardless of whether or not you’re approved for the card. This means anytime another lender requests your credit reports within that two-year span, they can see who else has been checking your credit. You can also see hard inquires on your credit reports under the section labeled Credit Inquiries.

Things to remember about hard inquiries

The most important things to remember about a hard inquiry are that it stays on your credit reports, as we detailed above, and can impact your credit scores. If there are too many hard inquiries in a short time frame, it will not only make you appear desperate to lenders, which can result in a denied application, but also have a negative impact on your credit scores. That’s why it’s not wise to apply for multiple credit cards at one time, especially if you keep getting denied. It’s important to keep in mind that if there’s a hard inquiry that you didn’t authorize or recognize, you can request to have it removed, similar to the way you can have other ­errors on your credit reports removed.

What is a soft credit inquiry?

On the other hand, a soft credit inquiry, also referred to as a soft pull, happens when your credit is requested, but not for the sake of granting you access to credit or any credit-related things. Unlike a hard inquiry, a soft inquiry can be completed without your permission, even for marketing purposes. For example, when you receive a preapproval from your bank for a loan or credit card you qualify for, the bank pulled a soft inquiry to make sure you’re a good candidate. Another example is when a company is checking your credit as part of your background check in the hiring process. If you’re ever unsure of whether or not a credit pull will count as a hard or soft inquiry, it’s best you contact the company, creditor or lender directly to verify the type of inquiry before they complete it.

Things to remember about soft inquiries

Unlike a hard inquiry, a soft inquiry will not impact your credit scores, nor will it show up on credit reports given to banks, lenders or other third parties, so there’s no need to worry about these types of credit inquiries having any positive or negative impact on your overall credit standing. Similarly, whenever you check your own credit reports, no matter how frequently or infrequently, it’s considered a soft inquiry, meaning it will not damage your credit scores.

How can I check my credit reports and scores?

Checking your credit reports and scores is an essential step before you apply for a credit card, but there are also some benefits to always being in the know with your credit. The good news is, as we described above, you can check your own credit without impacting your credit scores, and contrary to what you may have heard, there is a way to check your credit reports for free. That’s because the Fair Credit Reporting Act allows every U.S. citizen to check their credit reports from the three major credit bureaus — Experian, Equifax and TransUnion — once a year for free through AnnualCreditReport.com. You can request all three reports at once or opt to receive your reports individually. Unfortunately, this legislation doesn’t extend to credit scores — that may change soon — which means you’ll have to pay a small fee to check your credit scores.

While checking your credit reports and scores once per year is handy, it isn’t often enough to really get an understanding of your credit health or catch potential fraudulent accounts on your reports. As such, you may want to consider enlisting the help of a credit monitoring service. These services offer three-bureau monitoring, alert you of changes made to your credit reports and scores as well as provide you with explanations of factors that are hurting or helping you credit scores. Plus, a handful of these services offer free trials, which allow you to test the service prior to making a financial commitment. Visit our credit monitoring reviews to find the best service for your needs, and keep up with our credit monitoring blog to learn more about your credit reports and scores.