Applying for a mortgage won’t be the only time you hear the term “hard credit check”; applying for any loan may result in one. You may also hear the term “soft credit check.” Unlike a hard credit check, a soft credit check typically does not affect your credit score and may be used for things like background checks.

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A hard credit check and a soft credit check are two types of inquiries that can be made on your credit report by lenders or financial institutions.

A hard credit check, also known as a hard inquiry, occurs when you apply for credit, such as a loan or a credit card. This type of inquiry can impact your credit score and is visible to other lenders. Multiple hard inquiries within a short period of time can suggest that you are actively seeking credit and may have a negative impact on your creditworthiness.

On the other hand, a soft credit check, also known as a soft inquiry, is typically done for background checks or pre-approval offers. It does not affect your credit score and is not visible to other lenders. Soft inquiries may include checking your own credit score or when a lender pre-screens you for a promotional offer.

In summary, hard credit checks have a greater impact on your credit score and are visible to others, while soft credit checks have no impact on your score and are not visible to lenders considering new credit applications. It’s important to be aware of which type of inquiry is being conducted to understand how it may affect your creditworthiness.

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