What's the difference between a hard and soft credit check?

A hard credit check happens when you apply for credit, and it can lower your score by a few points for up to a year. A soft check, like checking your own credit or a prequalified offer, never affects your score.

Hard inquiries come from applications

The CFPB describes hard inquiries as checks by lenders after you apply for credit. They can affect your score because most scoring models look at how recently and how often you apply, and other lenders can see them.

Soft inquiries never count

Soft inquiries include your own checks, reviews of your existing accounts, prescreened offers and employment screening. They don't affect your scores and only you see them on your report.

The effect is small and short

FICO says one more inquiry takes fewer than 5 points off for most people. Hard inquiries stay on your report for up to 2 years, but they only affect FICO scores for 1 year.

Shopping for one loan counts once

FICO treats several mortgage, auto or student loan inquiries within a 14 to 45 day window as one, and ignores them for the 30 days before scoring.

What counts as a hard check

A hard check, or hard inquiry, happens when you ask for new credit and the lender pulls your report to decide. Applying for a credit card, car loan, mortgage, student loan or personal loan are the usual cases.

The inquiry shows on your report to anyone who later pulls it. Scoring models read a burst of applications as a sign that you might be taking on a lot of new debt, which is why inquiries carry a little weight. FICO puts new credit at about 10% of the score, and inquiries are only part of that.

What counts as a soft check

A soft check is any look at your credit that isn't tied to a new credit application. The CFPB lists your own requests for your reports, reviews of your existing accounts by lenders or insurers, prescreened offers you didn't ask for and employment screening.

Soft checks don't change your score. They show up only on the copy of your report that you see, not on the one lenders buy. You can check your own reports and scores as often as you want without any cost to your score.

How much a hard check costs

For most people, FICO says, one additional inquiry takes fewer than 5 points off a FICO score. It can matter more if you have few accounts or a short history, since each piece of information carries more weight.

The effect fades. Inquiries count in FICO scores for 12 months and drop off your report after 2 years. Paying on time and keeping balances low matter far more.

Rate shopping without the penalty

Shopping around is how you find the lowest rate, and scoring models allow for it. The CFPB says inquiries for the same kind of loan made within 14 to 45 days of each other generally count as one. FICO says the window is 14 days on older score versions and 45 days on newer ones, and that it ignores these inquiries for the 30 days before a score is figured.

Shopping for two different kinds of loans, like a mortgage and a car loan, counts as two inquiries. Credit card applications fall outside FICO's grouping, so each one can count on its own.

If you see a hard inquiry you don't recognize

Look up the company name first, since a car dealer may send your application to several lenders. If you never applied with that company, dispute the inquiry with the credit bureau and check for other accounts you didn't open.

A credit freeze stops new lenders from pulling your report unless you lift it, which blocks most fraudulent applications. Freezing and unfreezing is free at each bureau.