Hard vs Soft Inquiries

A hard inquiry happens when you apply for credit and a lender pulls your file to decide. A soft inquiry is every other look: you checking yourself, a lender screening you for an offer, an employer with consent. Only hard inquiries can cost you points.

Why it matters

People avoid checking their own credit out of fear it hurts them. That fear is backwards. Your own checks are soft and free; it is unmanaged application sprees that sting.

Key facts

• A single hard inquiry typically costs fewer than five FICO points, and the effect fades within months.
• Hard inquiries stay on the report for two years; FICO only counts the last 12 months.
• Rate shopping for a mortgage, auto, or student loan inside a short window (FICO treats recent versions as 45 days) counts as one inquiry.
• Soft inquiries are visible to you but not to lenders.
• Checking your own score or report is always soft, always free, and never harmful.

In practice

1. Check your own reports regularly; it is the safest habit in this whole book.
2. Batch loan applications into a short shopping window instead of spreading them over months.
3. Question any hard inquiry from a company you never applied to; it can be fraud or a clerical error.