The Two Credit Pulls

the two credit pulls

Things to know about hard and soft credit pulls

When a lender checks your credit report, it’s either a hard inquiry or a soft inquiry. The former impacts your credit score, while the latter doesn’t. However, it’s important to know the differences between the two. Let’s take a look.

Hard Inquiry

Hard inquiries (or “pulls”) occur when a lender checks your credit to see your creditworthiness. Common hard pulls are from mortgage applications, credit card applications, auto loan applications, and student loan and personal loan applications. One hard inquiry could knock your credit score down, but it’s usually only by a few points and it’s also usually temporary. Generally speaking, the better your overall credit is, the better it will withstand a hard pull.

Rate Shopping Exemption

One thing you don’t want to do is let the fear of hard pulls stop you from shopping for the best offers from lenders. Both FICO and VantageScore give you a window, or grace period before hard pulls show up on your report. For FICO it’s 30 days and for VantageScore, it’s 14. That means you can shop offers and rates in those time windows and the pulls will be counted as one. The fewer hard pulls, the less impact on your credit score.

Soft Inquiry

Soft inquiries occur when credit card companies offer you a promotional deal, you check your own credit score or a company conducts a background check. These pulls do not impact your credit score.

The Big Tell

As you can see, the main difference between hard and soft pulls is that with hard pulls, you are asking a lender to check your creditworthiness. A soft pull is usually just the opposite.

Chris O'Shea

Latest Posts

Powered by: SavvyMoney