What Is a Soft Inquiry on Your Credit Report?
Whenever a business checks your credit report, an inquiry is placed on your report. The credit bureaus do not keep track of inquiries as a favor to you or the businesses who may view your credit report in the future. Rather, the Fair Credit Reporting Act (FCRA) requires credit bureaus to keep a record of businesses that check your credit report.
When you check your credit report, you will 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 have never heard of. Do not overreact, since these are likely soft inquiries and are not 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 do not affect your credit score no matter how many of them appear.
How Is a Soft Inquiry Different From a Hard Inquiry?
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 another credit-based service. Hard inquiries count for 10% of your credit score. While they will 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 are 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 is pulling your credit report. You will want to minimize hard inquiries if you are trying to maintain a good credit score—and especially if you are planning to apply for a major loan soon.
How Do Soft Inquiries Affect You?
You already know that soft inquiries are not included in your credit score. In turn, you do not have to worry about these inquiries costing you precious credit score points. When potential lenders check your credit report, they will not 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 will not count against you when it is 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 is your version of your credit report.
myFICO. "Credit Checks: What Are Credit Inquiries and How Do They Affect Your FICO Score?" Accessed Feb. 10, 2020.
U.S. Federal Trade Commission. "Fair Credit Reporting Act." Accessed Feb. 10, 2020.
Experian. "Hard vs. Soft Inquiries on Your Credit Report." Accessed Feb. 10, 2020.
Experian. "What Is a Soft Inquiry?" Accessed Feb. 10, 2020.
Equifax. "Understanding Hard Inquiries on Your Credit Report." Accessed Feb. 10, 2020.