Written by: Eric Bank
Edited by: Austin Lang
Reviewed by: Jon McDonald
What are some things we consider soft? Well, you got your soft-boiled eggs, soft tissues, soft-shelled crabs, soft inquiries … Wait! What? What the heck is a soft inquiry? That, dear reader, is the question I’m going to answer today. It’s one of the most important financial tools you have, but many folks don’t know much about it.
A soft inquiry is a credit check that doesn’t affect your credit score or appear on your credit report to anyone but you.
A soft inquiry occurs when someone checks your credit without affecting your score, such as when you check your own credit or get preapproved for a loan. It’s not going to lower your credit score or put a mark on your credit report, unlike a hard inquiry may. I’m going to cover everything from the basics of soft inquiries to how you can use them to your benefit.
Soft Inquiry Basics
A soft inquiry is like taking a peek at a pie cooling on a windowsill — nothing gets touched, and it leaves no trace. When someone requests a soft inquiry into your credit reports, it doesn’t hurt your scores one bit. It goes totally unnoticed because only you get to see it.
Common Scenarios for Soft Inquiries
The most common soft inquiry occurs when you check your own credit. Perhaps you’re interested in your score, or you want to know exactly what a lender’s looking at. Pulling your own credit always creates a soft inquiry. It’s harmless as a spring breeze and an excellent habit for keeping tabs on your credit health.
Preapprovals for credit cards or loans involve soft inquiries, too. They occur when you’re shopping for credit or have received preapproved cards or loans in the mail. During preapproval, creditors do a little background check to see if you fall in the ballpark for them to make an offer. These checks won’t impact your score or show up on your record.
Employers often use soft inquiries when they’re deciding whether to hire you. They’ll take a little peek at your credit as part of a background check, especially if their job entails handling money. The same is true with landlords: When you are trying to rent out a place, they can soft-pull your reports to make sure that you can consistently make rent.
There’s even a rumor that some dating services use soft inquiries to check a person’s financial record. Their reasoning is that if someone is responsible with money, then they are more likely to be responsible in a relationship. Personally, I find this logic to be quite flawed, but some people buy into it.
The Difference Between Soft and Hard Inquiries
Imagine the different impacts a butterfly and an elephant have on their surroundings. The first is virtually undetectable, and the second leaves massive footprints and stripped tree bark.
Soft inquiries are the butterflies of the credit world, but the elephants are analogous to hard inquiries. The latter occurs when you apply for a credit card or loan and can lower your credit score by a smidgen.
The following table summarizes the differences:
| ASPECT | SOFT INQUIRY | HARD INQUIRY |
|---|---|---|
| Impact on Credit Score | None | Can lower your score slightly for up to one year |
| Visibility to Lenders | Not visible | Visible to lenders |
| Purpose | Prequalification, background check | Applying for credit, loans, mortgages |
| Authorization Required | Not needed | Always requires your permission |
| Stays on Credit Report | Only shows to the account owner | Stays on report for up to two years |
| Frequency Allowed | Unlimited without damage | Too many can harm your score |
| Timing of Check | Before preapprovals or job applications | During formal loan or credit applications |
Whether you’re pulling your own credit or shopping around for a card, soft inquiries keep you in the clear. In contrast, their hard-hitting cousins leave tracks for everyone to see.
Why Soft Inquiries Don’t Impact Credit Scores
Now, why don’t soft inquiries lower your credit score? It’s all about intent. When there is a soft inquiry, you haven’t yet applied for a loan for a credit card. It’s like window shopping — you aren’t buying anything, just looking. The only person who will ever see your soft inquiries is you.
However, what about the people who actually might be lending you money sometime in the future? They won’t see soft inquiries, so your score stays nice and tidy. It’s only when you formally apply for credit that you give the creditor permission to see your credit history through a hard inquiry.
More About When Soft Inquiries Happen
It’s important to know when soft inquiries occur. They are like whispers in the wind — quiet, yet still there. You should know where and when they pop up to help figure out how a person or institution formed an opinion about you.
Checking Your Own Credit
Pulling your own credit report is like looking in a mirror — you’ve got to make sure you’re still as good-looking as you think!
When you pull your credit report, that’s a soft inquiry that won’t hurt your score one iota. You’re just taking a peek under the hood, seeing how your financial engine’s running, and it’s a good habit to get yourself into. After all, you wouldn’t let your car run without checking the oil now and then!
If you find something funky — an error or omission — you can roll up your sleeves and get it fixed. You do this by contacting the credit bureau that got it wrong and filing a dispute.
Most times, they must answer in 30 days, so you can get a resolution quickly. Periodically check all three of your credit reports to make sure problems don’t pop up again like weeds after spring rain.
Pulling your credit report gives you a look at what lenders see when they size you up for a loan or credit card. Knowing what’s in there lets you steer your financial future like a cowboy wrangling a wayward calf — you’re in control.
Regularly checking credit also serves to keep you whip-smart about credit health. If you stay on top of it, no pesky surprises such as identity theft or unauthorized hard inquiries will go unnoticed. And since it’s a soft inquiry, you don’t have to worry about leaving any fingerprints on your credit reports.
Preapproval for Credit Offers
Now, what about preapprovals for credit cards and loans? Those are kind of like when a recruiter contacts you about a job. You didn’t ask for it, but they think you might be a good fit.
When financial institutions send you preapproved offers, they usually perform a soft credit pull to see whether you qualify. That means they’ve taken a look at your credit without scuffing up your score. It’s their way of saying, “We think you’re responsible enough to handle this card or loan.”
But there’s a difference between those preapprovals that come to your mailbox and those that you seek out for yourself. The ones in the mail are simply freebies that you didn’t ask for. Financial institutions send them based on general information, and if you’re interested, you can choose to take the bait.
But you can go online and apply for a preapproval yourself. You’re actively requesting to see what offers are available to you. It’s still a soft inquiry, though, so your credit score won’t suffer.
Online preapprovals let you see whether you have a chance to get a final approval. However, always keep in mind that preapproval never guarantees final acceptance. That’s because things may show up during a hard inquiry that deep-sixes your application.
Think of a preapproval as test driving a car — you’re trying it on for size without committing to it. Successful preapproval usually gives you an idea of what kind of credit or loan terms you may get if you apply for the real thing, but your credit score remains pristine until you submit a formal application.
Background Checks by Employers or Landlords
Employers and landlords use soft inquiries to check out whether they want to do business with you. When you apply for a job or an apartment, they might run a soft pull on your credit to make sure you’re reliable. It won’t mess with your score; it’s just part of their background due diligence routine.
What they really would like to know is if you’ve been responsible for the money you’ve borrowed. They will check your payment history, any outstanding debts due, and so on. If you have been as regular as five o’clock shadow in paying all your bills on time, you’ll look great to them. But if you have been fast and loose with your loan payments, that may give them pause.
Now, the law does say that employers and landlords have to follow some rules when it comes to these checks. Generally, they must get your permission even to run a soft pull and they cannot simply deny you a job or an apartment based on the information within your credit report.
There are federal protections against this, so if they’re going to use your credit against you, they must be upfront about it and at least give you a chance to explain any rough spots.
How to Use Soft Inquiries to Your Advantage
Soft inquiries are like a sneak peek at the dessert table before dinner. You get all the information without any of the consequences. They let you keep tabs on your credit health and sniff out the best offers without messing with your score.
Check Your Reports Regularly Without Impact — For Free
Thanks to the COVID-19 crisis, you can get free copies of your credit reports from the three big credit bureaus: Equifax, Experian, and TransUnion.
These free reports let you keep an eagle eye on your credit health. The best part is that pulling your own credit doesn’t cost you anything in terms of your score. You can check as often as you like without worrying about any hard inquiry penalties.
Checking your credit regularly keeps you in the know about what the bureaus are saying about your finances. It’s a lot like mending fences on your ranch. If you keep up with it, you won’t have to chase down any stray lambs later on. Every soft inquiry you do shows if anything changed, whether it’s your credit score or some new account appearing out of nowhere.
When you’re pulling these reports, there are a few things that you need to watch for because they might be red flags:
- Accounts you don’t recognize: It might be someone trying to steal your identity.
- Payment history mistakes: A common problem because occasionally they mark you late when you have been as timely as the rooster at dawn.
- Hard inquiries you didn’t authorize: Other people might be trying to take out a loan in your name.
- Sudden dips in your scores: These might indicate that something big has been reported, like missed payments or new debt.
Regular check-ups let you catch any funny business before it blows up. They are free, so there isn’t any reason not to take advantage of these soft pulls!
Use Prequalification Offers to Check Approval Odds
Prequalification offers are like a sneak peek at a guest list — you get to know whether you’ll be invited without committing to show up. Soft inquiries allow lenders to decide whether you have a chance of getting approved for a loan or credit card, and these queries do not cost you even a single point of your credit score.
There’s no sense in wasting a hard inquiry on a long shot if you don’t prequalify for a card or loan. If you don’t prequalify, trying to force through an application wastes your time and can hurt your credit score.
Preapprovals are a great way to see whether you qualify for a loan or credit card without triggering a hard credit inquiry, but remember, final approval is never guaranteed.
Hard inquiries leave marks like tire tracks down a dirt road, and too many of them can weigh your score down. Soft pulls let you shop around and see your chances without getting stuck in the mud.
Some credit card issuers do not respond to preapproval queries for a particular card. Instead, they may just offer you a list of recommendations. You can look at the offers and choose which one to apply to.
Some loans and credit cards never do hard checks. If you’re interested in this kind of product, skip the entire preapproval process and apply directly. No hard pull means no hassle and smooth sailing. It’s like finding a shortcut through the woods instead of having to take the long road.
Soft Inquiries Provide Credit Score Insight Without Impact
Soft inquiries are like looking out the window at the weather — you get a clear picture of what’s coming with no need to step outside and get soaked.
They give you all the insight you need into your credit health without knocking your score down, like some poorly stacked hay bale. If you can figure out how to soft-boil an egg, you’ve got the wits to do a smooth pull and check your credit reports!
