Soft vs. Hard Credit Checks: What You Should Know
Understanding if and how a credit check may impact your credit score can help you make better decisions to maintain your financial health. If 2020 & 2021 has shown us anything, it is that life is unpredictable – but that doesn’t mean your credit has to be. Understanding what credit checks are and when they impact your credit score can help you stay on top of your credit health.
What Is a Credit Check?
Your credit report summarizes your credit history, including your personal details, accounts, public records, and credit checks. When your credit report is accessed, it’s called a credit check (or a credit pull or inquiry). Credit checks stay on your report for up to two years. There are two types: hard and soft. Understanding which type affects your credit score can empower you to make smart credit decisions.
Soft Credit Checks
Soft pulls occur when your credit is accessed without a financial or lending determination being made, like when you are pre-qualified or pre-approved for an offer.
- Don’t require your permission
- Are visible only to you
- Don’t affect your credit score
- May be performed as part of a background check for employment
- May be performed by lenders or insurance agencies to pre-qualify or pre-approve you for offers
If you pursue an offer, the entity will need more information to make an official determination and may request a hard pull of your credit.
Hard Credit Checks
Hard pulls are performed when a lender is making a final lending or financial determination, like when you apply for a mortgage.
- Require your written permission
- Are visible to anyone checking your credit
- Can drop your FICO® Score by up to five points per inquiry
- May be performed when you apply for a loan or line of credit, like a student loan
- May be performed instead of a soft credit check when you apply to rent a living space
Hard pulls stop affecting your FICO® Score after one year.
Better Credit, Better Life
Managing your credit checks can protect your credit score and lead to money-saving benefits. Call us at 800-231-1626 or visit FirefightersFirstCU.org resources to learn more about credit and borrowing.