How Hard and Soft Inquiries Affect Credit Scores

How Hard and Soft Inquiries Affect Credit Scores

Consumers are often confused about the effect of inquiries on their credit scores. consulted experts about the differences between hard and soft inquiries, how the big three credit bureaus’ report on inquiries, and inquiries’ effects on credit scores. Their experts explained that a hard inquiry means the consumer actively applied. for credit. Soft inquiries are reported anytime you review your own personal credit report, your credit is evaluated by existing creditors, or you receive a promotional credit card offer in the mail. Soft inquiries have no impact on your credit report or score.

How big of a hit on your score do hard inquiries create? It varies.“Applying for one credit card every so often is no big deal, but when you apply for more than one at a time, you look desperate for money that you don’t have to prove you have upfront, and that is why it can have a decent effect on lowering your credit score,” says Matthew Coan, owner of the credit card comparison website

The impact also depends on existing credit history. “The hit is usually about three to five points per inquiry” according to Priyanka Prakash, of “While that may not seem like much, it adds up – particularly if you have borderline credit to start with. For some people, there’s no impact from a hard pull. In general, the shorter your credit history, the fewer accounts you have and the more recent inquiries you have, the greater the impact.”

Senior loan officer Heather McRae of Chicago Financial Services said she has seen a single hard inquiry drop a credit score by 12 points. “You can imagine the impact multiple inquiries can have,” she said. Hard inquiries stay on your report for two years.

If you are shopping around for the best mortgage rate or car loan rate, you will not necessarily be penalized. Best advice is to group your applications together as much as possible to be on the safe side. Mortgage inquiries in the same 14-day period count as one and there is a 30-day buffer, meaning no inquiry in the past 30 days affects your score today.”

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