Credit Report & Score

The Difference Between A Soft And Hard Credit Inquiry

The Difference Between A Soft And Hard Credit Inquiry
Reviewed by Nima Vahdat
Updated January 25, 2024

Soft inquiries are credit inquiries that do not affect your credit score but are recorded on your credit report while hard inquiries can affect your credit score.

Some of the most common questions about credit inquiries involve: what they are, how and when they affect one’s credit score, and the difference between soft and hard credit inquiries. 

Whether you realize it or not, your credit report is being assessed all the time, by your landlord, utility companies or your employer. But don’t worry; certain types of inquiries will not affect your credit score. 

However, there are two types of inquiries, soft and hard, that can have a significant impact on your credit score.


  • Soft inquiries do not have an impact on your credit score.
  • Hard inquiries can lower your score by a few points, but their effect is minimal and short-term.
  • Managing debt is more important than worrying about credit score fluctuations due to inquiries.

What Is The Purpose Of Credit Inquiries?

Firstly, let’s define what a credit inquiry is; it is when someone requests to see the information in your credit report

This will provide them with information such as your credit history, payment patterns, and current debt levels. By having this information, a lender or creditor can assess your creditworthiness and determine whether to approve your application for a loan or credit card.

As you may have noticed by now, not all inquiries are the same; there are two types: soft and hard inquiries. 

A soft inquiry is when someone checks your credit as a background check, such as landlords or by companies that are trying to pre-approve you for credit offers.

A hard inquiry occurs when you apply for new credit like a loan or open a new account. Each time this type of inquiry is made, your credit score may drop a few points. 

However, multiple inquiries within a short period, such as 14 days, will only count as one hard inquiry. This allows for you to shop around for the best rates on loans or credit cards without worrying about damaging your credit score.

Another reason why credit inquiries can be helpful for your personal finances is that they can help you monitor your credit report for fraudulent activity. 

If you notice any hard inquiries on your credit report that you did not authorize, this could be a sign of identity theft. In such cases, it is crucial to contact the credit bureau immediately and have them investigate the inquiry.

How Much Damage Does Each Of These Inquiries Cause?

No ‘damage’ in terms of reduction of your credit score will be caused by soft inquiries. Soft inquiries, such as background checks, don’t have any impact on your credit score at all. 

Alternatively, hard inquiries can remain on your credit report for up to two years but only impact your score for the first year. Soft inquiries do not impact your credit score, while hard inquiries can affect it by up to five points.

While it may seem like these inquiries have a significant impact on your credit score, the reality is that they are just one piece of the puzzle. 

Other factors such as payment history and debt levels have a more significant impact on your overall credit score. Let’s explore a more holistic approach to managing your credit health.

How To Manage Your Credit Health

One of the best ways to manage your credit health is through regular monitoring of your credit report. By knowing what’s on your report, you can dispute any errors and ensure accuracy in the information used to calculate your score. 

You can get a free copy of your credit report once every 12 months from each credit bureau. This is where soft inquiries come in handy – you can check your credit report without any negative impact on your score.

Another essential factor in managing your credit health is to make timely payments on all of your bills. Late payments can significantly impact your credit score, so it’s crucial to stay organized and pay on time.

Debt-to-income ratio is another crucial factor to consider when managing your credit health. Debt-to-income ratio is calculated by dividing all of your monthly debt payments by your gross monthly income. It gives lenders an idea of how much debt you can handle based on your current income level.

Credit card utilization is also a significant factor in managing your credit health. This is the percentage of credit you use compared to your overall credit limit. A high utilization rate can negatively impact your score, so it’s essential to keep it low by paying off balances regularly and not maxing out your cards.

Final Thoughts On Credit Inquiries And Your Credit Score

After you’ve seen where your credit stands, you may want to find ways to increase your score and as mentioned earlier, less debt is better. 

If you are struggling to keep up with payments, consider seeking debt consolidation or debt settlement services. These programs can help you reduce your overall debt and make it more manageable to stay on top of payments.

At Americor, we understand the importance of managing your finances wisely. 

As America’s trusted source for debt relief solutions, we aim to empower you with financial knowledge that can lead to informed decisions, whether it’s about savings, investments, or managing debt.

If your debt has become unmanageable and you have difficulty making your debt payments each month, then you should consider a free consultation call with one of our certified Debt Consultants, who can provide personalized advice tailored to your specific needs.

By taking proactive steps today, you can put an end to your financial stress and work towards a brighter financial future. 

Remember, there is always hope for debt relief, and our team of experienced professionals are ready to guide you on your journey to regaining control of your finances.

For more information on Americor’s debt relief services, contact us today to see how we can help you eliminate your debts, and get on the fast-track to becoming completely debt-free!