Soft vs Hard Credit Checks: What’s the difference?

When researching for loans you may notice that ‘soft pull’ and ‘hard pull’ comes up fairly often. You’ll often find warnings about a hard pull nested in the terms of various applications or you might see that a credit check is associated with a soft credit inquiry (like when applying for a loan with us!). But what do these terms actually mean? And which of these two options is preferable when you’re applying for credit?

What’s the Difference Between a Hard and Soft Pull?

A hard and soft credit pull are both types of credit inquiries that describe the process of pulling your credit history for examination for potential lenders to do a background check. They’re essentially another way of describing credit inquiries. These pulls are typically done before any significant and long-term financial transaction and credit applications.

Typical instances you might have a credit pull performed:

  • by a credit card company when applying for a credit card.
  • by mortgage lenders when getting a home loan.
  • by insurance companies when shopping for insurance quotes.
  • by personal loan lenders for auto loans.
  • or even by a potential employer when applying for a job.

Hard pulls are typically done when applying for new lines of credit. While soft pulls often have a broader range of association. Though it’s usually best to assume the type of inquiry is a hard pull unless it specifically states otherwise. For example, Viking Capital only uses soft credit checks so you can be assured that any credit inquiry will fall into that category.

The main difference between soft and hard pulls involves the impact on credit scores. Hard pulls are associated with new lines of credit and creditors are often worried that someone seeking additional credit might be overextending their financial capabilities. Because of this, a hard pull can have a negative effect on credit scores. This can have a detrimental effect on your finances, credit inquiries can influence 10% of your FICO score. And a hard pull can lower FICO scores by up to five points. Whereas a soft inquiry will have no impact on your credit score.

How Long Do Hard Inquiries Stay on Your Credit Report?

It’s quite common for people to wonder why their credit score dropped when looking into a new line of credit. There are a lot of explanations for this phenomenon. But one of the larger issues simply involves time. Your actions, even with something as commonplace as a credit pull, can stay on your report for longer than you might expect. And people who wonder how often does your credit score update are often surprised to discover that updates happen quite rapidly.

FICO only takes hard pulls from the past twelve months into account when calculating credit scores. But the inquiry itself can still be seen for twenty-four months. Meanwhile, a soft credit inquiry will remain on your credit report for the same period of time but it’s important to remember that a soft credit pull doesn’t have any effect on credit scores.

How To Minimize the Impact of Hard Credit Inquiries

Due to a hard inquiry having a negative effect on your score you should keep them to a minimum and only have them done when you are actually taking out a new line of credit. 

A clear way to lessen the impact of a hard inquiry so to just have a better overall score, as noted previously the pull can take 5 points out of your score but 5 points out of a score of 600 is much more impactful than the same 5 points out of a score of 800. To do this work on improving your score by following best practices and make a focused effort to improve your attractiveness to credit lenders. 

There’s also another important method you can use to minimize the impact of hard pulls. This is the rate shopping exception. 

The Rate Shopping Exception

Consider a situation where you want to search through all of your available options before taking on a new loan. It’s natural for this process to generate multiple hard pulls. However, remember why hard pulls are considered in a negative light by creditors, because of an underlying concern about people extending their credit beyond their financial means. But shopping through options suggests someone who’s careful about their finances which is obviously a positive thing and consumers doing their due diligence should not be punished. This can be taken into account by a credit bureau as a 14-day “safe harbor period” for rate shopping. Rate shopping essentially refers to the process of shopping around for the best options and means that in many cases only the first hard inquiry made within a 14-day period will have a negative effect on credit scores as they will all essentially end up grouped together into a single inquiry. This time period varies between the different credit rating companies but sticking to within 14 days will help with most of them.

Weighing the Options

The key idea of doing a hard or soft inquiry is that you should always go with a soft pull when possible so as not to have a negative effect on your score. And, so, it’s important to go with options like Viking Capital which only perform soft credit pulls when you apply for a loan so even if you do not end up getting the loan it still has no impact on your score.


At Viking Capital, we try to provide accurate information on loans, credit scores and pool care, but it may not apply directly to your individual situation. We are not financial advisors and we recommend you consult with a financial professional before making any serious financial decisions. The content on poolloan.net is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial or tax advisor.

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