Hard vs. soft credit searches

Traveler waits outside an airport while wondering what a hard vs. soft credit inquiry isImage: Traveler waits outside an airport while wondering what a hard vs. soft credit inquiry is

It can be helpful to think of your credit scores as a pie that represents your financial well-being.

Your pie is divided into slices, each of which represents a different factor that goes into your credit scores. Credit scores are based on such things as your open credit card utilisation rate, your payment history, credit limit and age of credit.     

And then there’s a tiny slice that represents your hard credit search, also known as a credit check. Every time you apply for more credit, you take a small bite out of this slice. But what exactly is a hard search, and how much of an effect does it really have on your credit?

Let’s start with the basics.



Hard credit checks generally occur when a financial institution, such as a lender or credit card provider, checks your credit report when making a lending decision. They commonly take place when you apply for a mortgage, loan or credit card.

A hard search could lower your scores by a few points, or it may have a negligible effect on your scores. In most cases, a single hard search is unlikely to play a huge role in whether you’re approved for a new card or loan. Most hard searches stay on your credit report for 12 months. 

You may want to think twice before applying for a handful of credit cards at the same time — or even within the span of a few months. Multiple hard searches in a short period could lead lenders and credit card providers to consider you a higher-risk customer, as it suggests you may be short on cash or getting ready to rack up a lot of debt. So consider spreading out your credit card applications.

Soft credit checks typically occur when a person or company reviews your credit as part of a background check. This may occur, for example, when a credit card      provider checks your credit to see if you qualify for certain credit card offers. Your employer might also run a soft search before hiring you.

Since soft searches aren’t connected to a specific application for new credit, soft searches (unlike hard searches) won’t affect your credit scores.

Examples of hard and soft credit searches

Companies do not always need to get your consent when they search your credit. However, they must have a legitimate reason, such as when you apply for a loan with them.

Let’s look at some examples of when a hard search or a soft search might be placed on your credit reports. Note: The following lists are not exhaustive and should be treated as a general guide.

Common hard searches

  • Mortgage applications
  • Loan applications
  • Credit card applications
  • Utility company applications
  • Monthly mobile phone contract

Common soft searches

  • Checking your TransUnion score on Credit Karma
  • You search your own credit report
  • Employment verification (i.e. background check)

If you’re unsure how a particular search will be classified, ask the company, credit card provider or financial institution involved to distinguish whether it’s a hard or soft credit search.


Bottom line

Your credit scores play a big role in your financial well-being. Before applying for credit, take time to build your credit scores. With stronger credit, you may improve your chances of being approved for the financial products you want at the best possible terms and rates.

To help you keep track of hard searches that may influence your credit score, check your credit report from TransUnion at Credit Karma. While one hard search may knock a few points off your scores, multiple inquiries in a short amount of time may cause more damage.