How are Soft Credit Checks Different From Hard Checks?

soft-credit-checks-different-from-hard-checksThere are several differences between soft and hard credit checks, including when they can be run, how much info they return, and whether they affect your credit score.

You’ve probably heard before that applying for too many loans or credit cards can hurt your credit score. And that’s true! When you apply for a new loan or card, the lender will pull up a copy of your credit report to check your history as a borrower.

When lenders do that, it’s referred to as a hard credit check, and it gets recorded on your credit report. Too many recent credit inquiries can indeed lower your score. However, there’s another kind of credit check—a soft credit check that doesn’t doesn’t affect your score at all.

Credit inquiries let lenders vet potential borrowers.

When a lender or a business (like a landlord or a utility company) wants to make sure a customer is trustworthy, they pull a copy of their credit report. The information on those reports is also used to create your credit score.

Credit reports are maintained by the three major credit bureaus: Experian, TransUnion, and Equifax. They contain a comprehensive history of how you’ve used credit over the past seven years, including payments you’ve made (or not made), how much you owe, how long you’ve been using credit, whether you have any liens or bankruptcies, etc. Some info, like bankruptcies, stays on your report for longer than seven years.

Pulling a person’s credit report—also known as a “credit inquiry” or a “credit check”—allows a lender to verify how a customer has used credit in the past. Have they paid their bills? Do they have too many loans or cards already? Have they been sent to collections or had a lien placed on them?

Getting the answers to all these questions is important to lenders, as those answers help them decide who to lend to and at what rates. The better a person’s history of using credit, the larger the loan or credit card they can get and the lower the interest rate they can qualify for. And if you have a poor history, the reverse is true. If your credit score is low enough, you won’t be able to qualify for loans from any traditional lenders.

Hard credit inquiries and soft credit inquiries.

There are two types of credit inquiries: hard inquiries and soft inquiries. Even though they both involve getting a copy of your credit history, they differ in some key ways.

Hard credit checks involve pulling a complete copy of your credit report. These checks are done by lenders when they are considering a potential borrower’s application for more credit. A hard check can only be done with the borrower’s express permission, and they are themselves recorded on that person’s credit report.

Soft credit checks, on the other hand, do not return a person’s full credit report. Instead, they return a summary of the borrower’s credit history. Because soft checks return much less information, they do not need the borrower’s permission to be run. Soft credit checks are included in a person’s report but are not visible to outside parties viewing the report.

A soft credit check is usually performed in one of three situations. First, a soft check occurs when a person views their own credit report. Speaking of which, you can request one free copy of your credit report per year from each of the three bureaus. To do so, just visit

Second, a potential employer can run a soft credit check when you are applying for a job. When it comes to jobs in the financial industry—or jobs where you are going to be handling a lot of money for the company¯businesses like to make sure that you don’t have a ton of outstanding debts. In those situations, they could also go ahead and run a hard check, but only with your permission.

Third, soft credit inquiries often they occur when a lender or credit card company wants to “pre-approve” a potential customer. If you’ve ever received an email or a letter telling you that you’re pre-approved for a personal loan or credit card, then that company has run a soft check on your credit.

If you were to apply for the loan or card, they would then do a hard check, which would give them a lot more information. Depending on what they find during that hard pull on your credit report, they might decide to turn down your application, despite your being pre-approved.

Unlike hard checks, a soft check won’t hurt your score.

This is one of the most important ways in which a soft credit inquiry differs from a hard inquiry. Simply put, hard credit inquiries will lower your credit score, while soft inquiries will not. Both hard and soft credit inquiries stay on your report for two years, but only hard inquiries are taken into account when determining a person’s score.

Of the five categories of information that are used to create your credit score, one of the less important categories is “new credit inquiries,” which makes up 10 percent your score. This category tallies up all the times that you’ve applied for a new loan or credit card in the past two years. Too many hard credit inquiries within the past year will cause your score to go down.

The reason for this is simple. A bunch of hard credit checks can mean that person is desperate for new lines of credit, which is a sign that they haven’t been managing their current loans and credit cards responsibly. That’s something no lender likes to see.

The two exceptions to this rule come with auto and home loans. Shopping for these types of loans is almost always going to mean a lot of shopping around which, in turn, means a lot of hard credit inquiries. As such, any hard inquiries for these types of loans made within the same 45-day period are bundled together into a single inquiry.

Since soft inquiries can be run without the borrower’s permission, and do not represent an application for more credit, they are not taken into consideration with credit scoring.

Soft credit check loans are safer than no credit check loans.

Another situation in which a soft credit check might be run is during an application for a bad credit loan. This is done so that, like with hard credit checks, the lender can get an idea of whether or not the borrower can afford the loan they’re applying for.

This is a good thing because there are many bad credit lenders that don’t run any credit checks at all. The loans they offer are referred to as “no credit check loans” and they include most types of payday loans, title loans, and cash advance loans. Not running a credit check is a sign that the lender doesn’t actually care if the borrower can repay their loan on time.

In fact, not checking a customer’s ability to repay can be a sign of something more sinister; the lender might be hoping that the customer can’t afford their loan. These lenders stand to make much more money from the borrower rolling their loan over and paying additional interest to extend the due date.

There’s a term for when a person is constantly rolling over or reborrowing a loan, only ever paying the interest owed, never the principal. It’s called a “cycle of debt.” And it can ruin lives. Whether it’s a loan from a storefront or an online loan you find on a website, you’d do best to steer clear of no credit check loans.

If you have an emergency and need a bad credit installment loan for some quick cash, find a lender like OppLoans that runs soft credit checks on all their applicants. And if you get turned down, don’t worry. It’s only a soft check, so your credit score won’t be affected.

To learn more about credit scores, check out these related posts and articles from OppLoans:

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The information contained herein is provided for free and is to be used for educational and informational purposes only. We are not a credit repair organization as defined under federal or state law and we do not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit. Articles provided in connection with this blog are general in nature, provided for informational purposes only and are not a substitute for individualized professional advice. We make no representation that we will improve or attempt to improve your credit record, history, or rating through the use of the resources provided through the OppLoans blog.