A hard pull and a soft pull are two types of inquiries made by creditors or lenders when accessing your credit report. They differ in their purpose, impact on your credit score, and the level of permission required. Understanding the difference between these types of credit inquiries is important, as they can affect your creditworthiness and credit score differently.
Hard Pull (Hard Inquiry):
Purpose: A hard pull occurs when a creditor or lender checks your credit report as part of a credit application process. This typically happens when you apply for a loan, credit card, mortgage, or any other form of credit.
Impact on Credit Score: A hard inquiry can have a negative impact on your credit score, albeit a relatively small one. It typically results in a temporary decrease in your credit score by a few points.
Length of Impact: Hard inquiries remain on your credit report for about two years. However, their impact on your credit score diminishes over time, and after about six months, their effect is minimal.
Permission: Creditors and lenders require your explicit permission to perform a hard pull on your credit report. By applying for credit, you are giving consent for them to access your credit information.
Number of Inquiries: Multiple hard inquiries within a short period (e.g., a few weeks) can be a red flag to potential creditors and may suggest that you are actively seeking credit, which could negatively affect your creditworthiness.
Soft Pull (Soft Inquiry):
Purpose: A soft pull occurs when your credit report is accessed for purposes other than credit applications. Examples of soft inquiries include when you check your own credit report, when a potential employer performs a background check (with your permission), or when a credit card issuer pre-approves you for a credit card offer.
Impact on Credit Score: Soft inquiries do not affect your credit score. They are not considered when calculating your creditworthiness, and they will not result in any changes to your credit score.
Length of Impact: Soft inquiries are not visible to lenders and do not appear on the credit reports seen by them or anyone else other than you. They do not affect your credit in any way.
Permission: For most soft inquiries, your explicit permission is not required. Checking your own credit report, for example, does not impact your credit and does not require any permission.
Number of Inquiries: The number of soft inquiries on your credit report is not a factor considered in your credit scoring, so multiple soft inquiries do not raise any concerns for potential creditors.
In summary, a hard pull is associated with credit applications and can impact your credit score, while a soft pull is unrelated to credit applications and does not affect your credit score. Being aware of the type of inquiry being performed on your credit report can help you manage your credit responsibly and avoid any negative impact on your creditworthiness.