Hard Credit Check vs. Soft Credit Check

Hard Credit Check vs. Soft Credit Check

Written by Mark Gregorski
Fact-checked by Caitlin Wood
Last Updated January 21, 2021

Your credit score is one of the most critical numbers that’s associated with your finances. Assigned by credit bureaus, it reflects your creditworthiness, which impacts your ability to approved for new loans and credit. Credit scores range between 300 and 900. The higher your score, the more creditworthy you are, and the easier it’ll be for you to be approved. 

One of the things that can affect your credit score is a credit inquiry. Financial institutions like banks and credit card companies check your credit score to assess the risk of lending to you. They do this by examining your credit report, which contains your history of borrowing and repaying loans. There are two types of inquiries conducted by lenders: a hard check and a soft check.

What is a Hard Credit Check?

A hard credit check is done to evaluate the risk of lending to someone looking for credit. When you apply for a loan, the lender will perform a hard credit check when evaluating your application. The lender will choose a credit bureau to provide them with a credit report that contains your full credit history. You must provide your consent to having a hard credit check performed on your credit history.

A hard inquiry is recorded on your credit report, which causes a small decrease in your credit score. Every hard inquiry performed remains on your file for an average of two years and is visible to anyone who views your credit report during that time. 

Ideally, you want to refrain from applying for too many credit products, especially during a short time frame. The presence of multiple hard credit checks on your report indicates an inability to service debt and signals to lenders that extending credit to you is risky. Hard credit checks account for about 10% of your credit score, so it’s wise to be conscious of how many you have on your credit report; too many of these inquiries can do significant damage to your credit score.

Shopping Around For Loan Offers

What about the scenario where you’re shopping for a home and are visiting multiple lenders to find the right mortgage, which inevitably results in numerous hard credit checks? Credit bureaus allow consumers some leeway by granting them a window of opportunity where multiple hard credit checks are counted as a single inquiry. The time frame depends on credit bureaus’ scoring model but usually ranges between 14 – 45 days. However, be aware that this exception doesn’t extend to credit cards – each hard credit check performed on a credit card application counts as one check, no matter how many you apply for.

What is a Soft Credit Check? 

A soft credit check provides less information than a hard credit check. It’s typically performed by a lender to prequalify you for a credit product, but it doesn’t function as an actual assessment that determines whether you’ll be approved for it. Soft credit checks are also done by employers and landlords as part of a background check and insurance companies to create an insurance-based credit score, which is utilized to set your premiums.

Find out why your lender is asking for a credit reference.

A soft credit check can only be viewed by you and the person who did the check, and they do not affect your credit score. However, soft credit checks can be legally performed without your permission.

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What Type of Information Shows Up For a Soft Credit Check vs a Hard Credit Check

A soft credit check provides a basic overview of your credit report and lists your loans, lines of credit, payment history, and collections accounts. A hard credit check includes a more comprehensive report, enabling lenders to conduct a more detailed examination.

Who Can Perform Hard and Soft Credit Checks? 

A wide range of entities can perform hard and soft credit checks. Some of the most common include:

  • Lenders 
  • Landlords
  • Insurance Providers
  • Utility Providers
  • Debt collection agencies
  • Employers 
  • Government 

Frequently Asked Questions

If I pull my credit, is it considered a hard or soft credit check? 

If you pull your credit report, it’s always considered a soft check.

What happens if I apply for the same loan with multiple lenders?

Suppose you’re applying with multiple lenders to obtain a mortgage, auto, or student loan. In that case, credit bureaus will give you a grace period where multiple hard inquiries are recorded as a single inquiry, thus minimizing the negative impact on your credit score (the grace period doesn’t apply to credit card applications). The grace period’s length is different for each credit bureau, but they typically range from 14 – 45 days. Because you don’t know which credit bureau a lender will rely upon to access your credit report, it’s prudent to complete your rate comparison shopping in as little time as possible. 

How long does a credit check stay on my credit report?

Most hard credit checks remain on your credit report for two years.

How can I reduce the effect of a hard credit check on my credit score?

You can minimize the adverse effects of a hard credit check by: 

Can a lender do a credit check without my permission?

Whether a lender can perform a credit check without your permission hinges on the type of inquiry that’s requested. A soft check doesn’t require your permission, while a hard check does. Lenders can perform a soft credit check without your consent to prequalify you for a credit card, which occurs without an application. Utility companies, insurance providers, and prospective employers also can legally perform soft credit checks and are not obliged to obtain your permission. However, if you’re directly applying to acquire a loan, the lender will need to conduct a hard credit check on your file and thus requires your consent to do so.

Bottom Line

The key difference between a soft credit check and a hard credit check is that the latter affects your credit score. The effects of occasional hard inquiries on your credit score are negligible but accumulating too many over a brief period can lower it significantly. Your credit score is a critical number that is regularly scrutinized by lenders, so ensure you only seek credit when you really need it and always work to manage your debt responsibly.

Credit Glossary

Business Credit Report

A detailed report that is meant to provide potential lenders with information to allow them to determine the business’ creditworthiness before extending credit. There is much more information in a business credit report when compared to an individual’s credit report. Business credit reports are generated and regulated by the credit bureau.

Business Credit Score

A number that represents a business’ creditworthiness based on information within the credit report. The credit bureau calculates and regulates business credit scores.

Consumer Reporting Act

A governing body that oversees credit reporting agencies to ensure that personal information is collected, maintained and reported in a responsible fashion. The Consumer Reporting Act also ensures that individuals have the right to know what information is being reported in relation to them and who the information is being reported to. If any of the reported information is incorrect, you have the right to have it corrected under this act.


The extension of money, goods or services with trust that the individual will repay the owed amount in the future. In today’s world, trust of repayment is determined through an assessment of creditworthiness using a credit application.

Credit Application

A formal application, required by the majority of lending institutions, that gathers information from the applicant for the assessment of creditworthiness. The form will request information such as personal identification, income and expenses, residency, existing debt, and employment.

Credit Bureau

A governing body that collects credit information about individuals and sells it to other entities that are in the business of extending credit for a fee. Credit bureaus are also referred to as consumer reporting agencies and credit reporting agencies. In Canada, there are two credit bureaus, TransUnion and Equifax.

Credit Card

A financial product that allows cardholders to purchase goods and services using credit. The amount spent in a particular period becomes due at a specific date. If the amount is not paid on that date, interest will come into effect. Credit cards are a physical, plastic card.

Credit Limit

When a creditor extends credit to a consumer it comes with a credit limit, this is the maximum amount the consumer can borrow.

Credit Rating

Credit bureaus collect information about your personal finances and rate you to give potential lenders an easy way to assess your creditworthiness at first glance. There is a rating system in place for consistency and to protect from bias. Credit ratings are different from credit scores but are often used interchangeably. Your credit score actually determines what credit rating you’re given. As an example, if you have a credit score of 850, you’d be given a credit rating of “excellent”.

Credit Repair

The act of improving your credit score by removing inaccurate information from your credit report and working on healthy, responsible financial habits.

Credit Report

A credit report contains information regarding your credit history and includes things such as your credit score, payment history, financial debts, record of debt payment, and any black marks on your credit. Credit reports can be obtained from credit bureaus, such as Equifax and TransUnion.

Credit Score

A three-digit number that is calculated by credit bureaus using a mathematical rating system and information from your credit report. A credit score falls anywhere between 300 and 900, with 900 being the absolute best. Lenders might have minimum credit score requirements for extending credit which is why it’s important to maintain a healthy credit score.

Credit Union/Caisses Populaires

A type of bank that is owned by its members and operates for the benefit of their members. Credit unions are subject to provincial regulation and tend to be small in size and community-oriented. Because of these features, credit unions tend to be a superior way of investing, banking and lending. Credit unions are referred to as Caisses Populaires in Quebec.


By assessing the historical information associated with a consumers’ finances, creditworthiness is the amount of trust a lender places on a borrower in relation to the repayment of extended credit. Creditworthiness is assessed using a combination of credit report, credit score, credit rating and application information.

FICO Score

A credit score created by the Fair Isaac Corporation. FICO scores are used by lenders to determine a borrower’s creditworthiness before extending credit. Scores range between 300 to 900.


Whenever an entity, including yourself, requests a copy of your credit report, an inquiry is recorded. A hard inquiry is a request from a lender or any other individual that is assessing your creditworthiness. A soft inquiry is a request by you to view your own credit report. A large number of hard inquiries can indicate financial struggles to a potential lender.

Introductory Rate

A special promotional interest rate offered by credit card issuers for a specific period of time, such as a few months to a year. The goal with these rates is to attract new customers.

Revolving Credit

A type of credit agreement that allows customers to borrow against a pre-approved credit line when making purchases. A credit card is the most popular form of revolving credit. The borrower is responsible for paying the borrowed amount plus interest each payment period. Revolving credit is also referred to as open-ended credit or charge account.

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Mark is a writer who specializes in writing content for companies in the financial services industry. He has written articles about personal finance, mortgages, and real estate and is passionate about educating people on how to make smart financial decisions. Mark graduated from the Northern Alberta Institute of Technology with a degree in finance and has more than ten years' experience as an accountant. Outside of writing, he enjoys playing poker, going to the gym, composing music, and learning about digital marketing.

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