Chris O'Shea
When you apply for a loan or a credit card, the lender looks at your credit report to determine your creditworthiness. This is known as a hard pull or a hard inquiry. Hard inquiries impact your credit score, so keeping track of them is important. Here’s what you should know about them.
Hard Inquiry vs Soft Inquiry
The main difference between a hard pull and a soft pull is that the former impacts your credit score, while the latter does not. A soft pull can occur when you check your credit or from a lender pre-approving you for a credit card.
Impact on Credit Score
When you apply for any form of credit — whether it’s a loan or credit card — the lender checks your credit report. That’s a hard pull. When the pull happens, your credit score will go down, but only by a few points or so. Over time you’ll see your score go back up.
Note: Of course, there’s a caveat to all this. If you have a lower credit score and have multiple hard pulls over a few weeks or months, your score will likely go down more than someone with a higher score. The impact of those pulls may also last longer. But don’t let it keep you up at night, hard pulls are typically removed from your credit report after two years.
Just One of Several Factors
While hard pulls can impact your credit score, they are not something you should worry about too much. Other factors — like payment history, credit utilization, credit history, and credit mix — carry much more weight when determining your score.
Do One Thing: Focus on keeping debt low and paying bills on time. This impacts your credit score much more than hard pulls.
