Hard vs Soft Credit Inquiries

Three mortgage applications in one fortnight count as one inquiry. The same three spread over two months count as three. That is the single most useful thing on this page and almost nobody is told it before they start shopping.

Here is the whole distinction, in one table, followed by the parts of it that actually change what you should do.

The difference, in one table

The CFPB draws the line the same way: hard inquiries are the ones "by lenders after you apply for credit" and affect your score, while reviewing your own reports "will not affect your credit scores".

What each one is used for

Soft pulls are how institutions look at you without you having asked for anything. Card issuers pre-screen mailing lists. Your existing lender reviews your file periodically to decide whether to change your limit. Some landlords and employers run a modified check, though employers see a report rather than a score and need your written permission.

Hard pulls are how a lender decides on an actual application. You authorised it, usually in a box you ticked, and it is visible to every other lender for two years.

The grey area is worth knowing about. "Check your rate with no impact to your score" usually means a genuine soft pull, and accepting the resulting offer triggers a hard one. Some car dealerships run a hard pull as part of "seeing what we can do", before you have decided anything. The question to ask, out loud, is: "Is this a soft or a hard check?" It is a normal question and the answer is a fact.

How long it lasts, and how much it costs

Two different periods get conflated constantly.

Twelve months: how long an inquiry is counted in your FICO score. After a year it has no effect at all.

Two years: how long it remains visible on your report. A human underwriter reading the report can see it in month eighteen even though the model has stopped counting it.

On cost, FICO's own guidance is that one additional inquiry takes fewer than five points off for most people. Put that against the factor weights: new credit is 10% of the score and inquiries are only part of that 10%, while amounts owed is 30%. Moving your reported utilisation is worth far more than avoiding an inquiry, and that is the lever in credit utilisation and the statement-date trick.

The cost is larger for a thin file. If you have three accounts and a two-year history, one inquiry is a bigger share of what the model can see. If you have nine accounts and fifteen years, it barely registers.

The rate-shopping window

Scoring models were built knowing that a sensible borrower compares lenders, and they handle it deliberately.

For mortgages, car loans and student loans, multiple inquiries inside a short window are collapsed into one. FICO puts that at 45 days on newer versions of the score and 14 days on older ones, and newer versions also ignore relevant inquiries made in the 30 days before scoring.

Worked through:

Since you cannot know which model a given lender pulls, the practical rule is fourteen days. That satisfies both windows and removes the question.

The cost of not doing this is worth naming, because it runs the other way from what people fear. Someone who applies to one lender to avoid inquiries, and accepts a rate a quarter of a point higher than the best available, pays far more over a mortgage term than a few points on a score ever cost them. Shopping is the money; the inquiry is a rounding error.

Inquiries you can refuse

Three worth knowing about.

Dealership finance checks before you have chosen a car. Say you are not applying for finance yet. If you are going to, do it on the same day as any other lender you are comparing.

Store cards offered at the till. That is a hard pull for a discount on one purchase, and usually a card with a punitive rate attached. Decline it.

Pre-screened offers. You can stop receiving them, which removes the temptation rather than the inquiry, since the pre-screen itself is soft. The opt-out is a standing federal mechanism rather than a per-issuer setting.

When this does not apply

If your file is thin or new. Everything here understates the effect. With few accounts, each inquiry is a larger share of a short history, and spacing applications out matters more.

If you are about to apply for a mortgage. In the six months before, treat every hard pull as expensive, not because of the points but because of the timing. Do not open a card, take dealership finance or transfer a balance in that window.

If you are using VantageScore rather than FICO. The models differ in how they group and weight inquiries. Most consumer apps show VantageScore and most mortgage lenders pull an older FICO, so the number you watch is not the number that decides your rate.

If the inquiry was not yours. An unrecognised hard inquiry can mean someone applied for credit in your name. Treat it as a possible fraud rather than a scoring question, and dispute it: disputing an error on your credit report.

Next steps

1. Pull your reports free at AnnualCreditReport.com and read the inquiries section on each. It is a soft pull and costs nothing.
2. Check for anything you do not recognise, and dispute it if you find one.
3. If you are shopping for a mortgage or car loan, put every application inside one fortnight and diarise the dates.
4. Before any credit check, ask whether it is soft or hard. It is a fair question and it is always answerable.
5. Spend the effort you were spending on inquiries on the two factors worth 65% of the score instead.