Finances (US)

Hard and soft credit check? Learn what this means!

Do you need to learn more about your score and how to keep track of it? If so, read on to know what a hard and soft credit check is!

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by Victória Lourenço

Published on 09/14/2022

What is a hard and soft credit check? Find out now and learn more about your credit score!

Learn what is a hard and a soft credit check. Source: Adobe Stock.
Learn what is a hard and a soft credit check. Source: Adobe Stock.

We all know that a score number is one of the most important things in someone’s financial life. So, you should know what affects your score. Read on to learn what a hard and soft credit check is!

onescore

How to join OneScore for credit monitoring?

Your credit score and credit report need to be monitored monthly! So, read on to learn how to join the OneScore free credit monitoring app!

Also, if you learn how to keep track of your score, you’ll need to learn about how your score works and how to keep hard checks away.

Moreover, you can never be too careful when applying for a financial product or loan. You should know that companies can perform hard credit checks without one single warning.

This way, if you are aware of how you should deal with your score and what are hard and soft credit checks, you can manage your finances better!

Also, you should know that both soft and hard checks and be on your credit report for years. So, be careful and plan your financial steps well before applying for anything.

So, if you want to always keep tabs on your credit score, report, and your finances, keep reading our post to learn more about what a hard and soft credit check is!

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What is a credit check?

When you apply for a loan or credit card, you'll have your credit score checked. Source: Freepik.
When you apply for a loan or credit card, you’ll have your credit score checked. Source: Freepik.

An application process for any financial product often includes a credit check by a potential lender, bank, or service provider.

The lender can then evaluate your creditworthiness based on the information provided. And this information can be affected by a hard and soft credit check as well.

And this can include your payment history, payment patterns, and the specifics of your present debt load.

Your credit report will be reviewed by the lending institution if you apply for a loan.

Also, you should know that your credit report is managed and created by all three of the major credit bureaus. And this will define your credit history.

Moreover, the reports show you how well you handle credit and where you have room to grow.

Learn what hard and soft credit checks are

Now that you’ve learned more about what credit checks are, let’s learn what hard and soft checks are. Well, you should know that both of them appear on your credit report.

Moreover, you can lose points from getting too many hard credit checks, which can significantly impact your score points. Also, the soft credit checks and be on your report for years.

However, your credit score will not be impacted by soft queries. Though soft queries do show up on your credit record, only you and the credit bureau may view them.

Also, a few points may be lost from your credit score due to a hard inquiry, but this shouldn’t be too detrimental to you in the grand scheme of things.

In contrast, if you make a lot of hard inquiries quickly, it could make lenders think you’re a risky borrower. So, read on if you want to learn more about hard and soft credit checks!

Soft check

Soft credit checks are done on you often, such as when you apply for a credit card, when a potential employer examines your credit, and when you check your own credit.

Instead, a soft inquiry is like the preapproved credit card offers you would get in the mail.

Although a soft credit inquiry may be recorded in your credit history with the three major credit bureaus (Equifax, Experian, and TransUnion), it has no bearing on your credit score.

Therefore, there is no need for concern regarding the impact of mild credit checks on your ability to establish an excellent credit history.

Hard check

A hard check will leave a mark on your credit score. Source: Freepik.
A hard check will leave a mark on your credit score. Source: Freepik.

Hard credit inquiries have a negative influence on credit scores in the near run. Even while a hard inquiry stays on your record for two years, the hit to your score usually fades within a few months.

It may look like you’re attempting to acquire loans and credit cards you can’t afford if you make a lot of hard queries in a short time.

In the case of large loans like mortgages and auto loans, for instance, lenders nearly often do extensive background checks.

The bureaus are aware that you could shop around for a loan offer from other financial institutions. This happens because you could do this to find the greatest potential rate.

So, you should not be penalized if you apply for many loans of the same sort within a 14- to 45-day time frame.

However, if you can’t ask for several forms of credit in a short period of time, including a personal loan. This is because it may be an indicator that you are trying to obtain more money than you can responsibly handle.

A hard inquiry will remain on your credit report for up to two years after it has been made.

Lenders can see any inquiries made during that time. However, each inquiry only counts against your credit report for a maximum of one year.

Now that you know more about a hard and soft credit check, you can read out the topic below to learn the main differences!

What’s the main difference between hard and soft checks?

We’ve talked about the features of a hard and soft credit check. Now we should highlight the main difference between them, so you get a better understanding of this topic.

Well, the main difference can be that a soft credit check does not affect your credit score too much. However, you’ll be able to see it on your credit report for about two years.

Also, a soft check can be used by companies just to see some information on your credit report that can help them evaluate you. Moreover, some examples are background checks, credit card companies, and lenders.

On the other hand, a hard check can severely impact your score in some cases. This is, if you go through processes that require too many hard checks, you’ll get a hard impact on your score punctuation.

Now that you’ve learned about these crucial financial terms, you can manage your finances better. Plus, you can have a healthier financial life!

And if you’re interested in keeping track of your credit score to improve your finances, read the following content. It is all about teaching you the best way to check your score.

credit report credit checks

Best way to check your credit score: learn now!

Do you need to improve your finances and have a higher score? Check out our post to learn the best way to check your credit score!

About the author

Victória Lourenço

Victória Lourenço is part of the finance writer team for The Mister Finance website. She is a translator and copywriter, having worked on finance topics for over four years. She has a goal to keep studying finances to help people learn more about how to use their credit cards, make loans, and use other money-related products in a way that they can find a more meaningful and healthy financial life!

Reviewed by

Aline Barbosa

Senior Editor

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