What is a Soft Inquiry on My Credit Report?
Whenever a business checks your credit report, an inquiry is placed on your report noting the month and year your credit report was checked. The credit bureaus don't keep track of inquiries as a favor to you or the businesses who may view your credit report in the future. Actually, The Fair Credit Reporting Act requires credit bureaus to keep a record of businesses that check your credit report.
When you check your credit report, you'll see a list of these inquiries toward the end of your credit report.
While all the inquiries appear in a list together, there are two types of credit report inquiries: hard inquiries and soft inquiries.
What is a Soft Inquiry?
You may be surprised to see inquiries from businesses that you never applied for credit with. Some may even be businesses you've never heard of. Don't be overreact; these are likely soft inquiries and aren't as serious as you might think.
A soft inquiry, sometimes referred to as a soft pull, is made on your credit report whenever you check your credit report, a business checks your credit report for promotional purposes, or a business you already have an account with checks your credit report. For example, a credit card company may request your credit report to decide whether to send you a pre-approved credit card offer. With the exception of your own requests for your credit report, soft inquiries are made without your permission. Fortunately, these soft inquiries don't affect your credit score no matter how many of them appear.
Hard inquiries, on the other hand, are placed on your credit report whenever a business checks your credit report to approve your application for a credit card, loan or other credit-based service. Hard inquiries count for 10% of your credit score. While they'll stay on your credit report for two years, hard inquiries only impact your credit score for one year.
Occasionally, a business will check your credit report for reasons other than to grant you credit. For example, rental car companies sometimes check credit if you're not using a major credit card. If you have questions about whether an inquiry will be hard or soft, you can ask the company who's pulling your credit report. You'll want to minimize hard inquiries if you're trying to maintain a good credit score and especially if you're planning to apply for a major loan soon.
How Soft Inquiries Affect You
You already know that soft inquiries aren't included in your credit score. That means you don't have to worry about these inquiries costing you precious credit score points. When potential lenders check your credit report, they won't see the soft inquiries. Instead, they will only see the hard inquiries that were made when you initiated an application for credit or credit-based services. The good news is that all those unrequested peeks into your credit score won't count against you when it's time for you to apply for credit.
If, however, you pull a copy of your credit report and provide it for a business to review, the soft inquiries will appear since it's your version of your credit report.