Understanding Soft vs Hard Credit Checks

Before I started routinely checking my credit, I believed the myth that checking it would hurt my credit score. This is because I didn’t know the difference between a soft and hard credit check. (We discuss what actually affects your score here).

Soft Credit Check

A soft credit check, also known as a “soft pull” or “soft inquiry,” reviews your credit file and existing accounts without affecting your score, according to the US Consumer Financial Protection Bureau (CFPB).

This happens when you check your own credit on sites like Credit Karma or with your bank provider. It also happens when a company pre-approves you for a credit offer or when an employer runs a background check. Even though these soft inquiries may show up on your credit report, they won’t harm your credit score.

Hard Credit Check 

A hard credit check, also known as a “hard pull” or “hard inquiry,” occurs when a lender checks your credit report after you apply for credit (e.g., loans or credit cards). 

Unlike the soft credit check, a hard inquiry can lower your score by a few points. This is because most credit scoring models look at how recently and frequently you apply for credit.

It’s important to know that having one or two inquiries is not something to worry about, but multiple hard pulls can make it harder to qualify for loans and lead to higher interest rates.

Tip: At Dyneri, we highly recommend checking your credit regularly with services like Credit Karma or through your bank provider. Most major bank providers (Capital One, Chase, Bank of America, Wells Fargo, Discover, and more) offer free credit monitoring services. 

Final Thoughts: Regularly monitor your credit to stay informed

Knowing the difference between soft and hard checks helps you take control of your credit. While soft inquiries don’t impact your score, hard checks can temporarily lower it. By routinely monitoring your credit through trusted services, you can stay informed without fear of hurting your score. The more you know about how credit inquiries work, the better equipped you’ll be to maintain a healthy credit profile and make informed financial decisions.