A soft credit check is when you or someone else checks your credit report but it doesn’t affect your credit score. As opposed to a hard credit check or inquiry which would stay on your credit report for up to two years and could potentially affect your credit score.
Hard and soft credit checks both involve a person or business checking your credit score or credit report. But there are some differences between them, most notably that a hard Credit check may affect your credit score while a soft credit check will not. If you’ve ever applied for a loan you may already be familiar with credit checks, hard and soft inquiries, and how they work. But for those that are not, read on to learn more about them!
A credit check simply means that someone has looked at your credit report or credit score. A credit report is the running list of debts, payments, and your complete borrowing history. It’s a detailed document that tracks your every financial move. A credit score on the other hand is a three-digit number that shows how trustworthy you are with money. Your credit score is directly affected by the information in your credit report.
Credit checks are performed for a number of reasons. If you’re applying for a new loan, a credit card, or even a job, you may be subject to a credit check. And whether that credit check is hard or soft will depend on the specific situation. Hard credit checks are performed when you apply for a new loan or financial product. Whereas a Soft credit check may be performed by a potential employer, by you yourself to check your credit, or by a lender that wants to pre-approve you for a loan.
The important thing to remember with credit checks is that hard credit checks can affect your credit score. If you apply for a lot of loans you may see your credit score dip. This is because applying for many loans can be viewed as financially irresponsible. And this may be reflected in your credit score. So be careful when considering a new loan, and only apply if you’re 100% sure you need it.
Credit Education & Credit Reporting