We follow high standards of editorial integrity on this website to help you make informed decisions. This article may include links to services and products from our partners. We may receive compensation when you sign up, at no cost to you. It does not change our unbiased reviews, evaluations or advice. Please take a look at our disclosure.

Checking Credit: Soft Check vs Hard Check


Reading Time: 4 Min

Part of good financial health is checking your credit report and score. You can improve your score by making sure your credit report is free of errors and you are up to date on your credit and loan payments. Other factors like diversity in types of credit and credit utilization impact your overall credit score.


When you apply for credit cards, loans, mortgages, and even telecommunication services, you authorize companies to perform a credit check on you. There are two types of credit checks, the soft check, and the hard check. These also impact your credit score, but in varying ways. To learn the difference between these two and when they apply, keep reading.

What is a credit check?

A credit check is an inquiry to your credit report. In Canada, there are two credit reporting agencies, Equifax and TransUnion. Authorized individuals and you can perform credit checks.


A hard credit check occurs whenever a third party views your report. Hard credit checks are also known as “hard pulls”. When you apply for credit cards, loans, or apartment rentals, you must authorize a lender or possible landlord to check your credit through a hard credit check. Creditors and landlords pull credit reports to assess if you are reliable and likely to make loan or rent payments.  


Other times, existing creditors can perform soft checks of your credit. In addition, a soft credit check applies when you pull your own credit report. Soft credit checks are also known as “soft pulls”. It is commonly used for background or maintenance purposes. Existing creditors will perform them to offer new credit products or offer higher credit limits, if you are eligible.

How do credit checks impact your credit score?

The main difference between soft and hard credit checks is the effect it has on your credit score. Hard credit checks impact your credit score, while soft credit checks do not impact your credit score. Another main difference between a hard and soft check is whether you authorized it for a specific application to gain new or more credit.


Hard credit checks are connected to specific applications you make for new credit and loans. Each time you put in an application for a mortgage, car loan, credit card, student loan, personal loan, or apartment rental, you are most likely authorizing a hard credit check. Companies use the information from your credit report, including your credit score, to assess if you are eligible and will be granted credit.


Hard credit checks are left on your credit report to show you have applied for new credit. A single hard check every so often will only put a small dip in your credit score, which should rebound quickly. Many hard credit checks in a small period will make a big dip in your credit score. A high volume of hard credit checks can be an indicator of financial struggle because it communicates that you’re actively and persistently seeking funds.


Soft credit checks are used for background information and maintenance. Credit card companies you already have accounts with will occasionally do a soft credit check to see if you qualify for new products or higher credit limits. When this is done, it does not affect your credit score. You can also authorize employers to perform soft credit checks, which they use for background information. Anytime you pull your own credit report, it is considered a soft credit check as well. Soft credit checks may be listed on your credit report, but they do not impact your score.

How long does a hard inquiry remain on your credit report?

A hard credit inquiry will remain on your credit report for two years. It should stop affecting your overall credit score in less than a year. The impact of a hard inquiry to your credit score reduces over time. With a single hard inquiry, a credit score should rebound in a few months. Maintaining payments, good credit history, and low debt utilization will help your credit score bounce back quicker.

Optimizing credit checks

As the consumer, you have a lot more control than you may think. Ask any company you are making an application for credit with if they perform hard or soft credit checks. Typically, it is a hard credit check. If you have other accounts with them, they may be able to perform soft credit checks instead. If you have good history with a financial institution, they want you as a customer and to sell you more of their products. While asking does not guarantee a soft credit check instead of a hard credit check, it allows you to make an informed decision. Even if you are sure there is no way around a hard credit check, it still helps to know.


Once you know what kind of check a company does, only apply for and allow hard credit checks every few months at the most. The best practice is to only authorized hard credit checks when you absolutely need it. Keep in mind if you plan on applying for a mortgage or car loan, you will want to avoid any hard credit checks for at least a year. This will increase your credit score and your chances of securing the mortgage or car loan. The reason being that lenders are less likely to authorize these types of products if you have taken a lot of new debt in the last year.


If you are applying for a mortgage, car loan, or personal loan, you may want to shop around. In this instance, you can absolutely apply to different institutions to secure the best interest rate and terms for yourself. Applying for the same type of loan and then choosing the best option in a two-week period will generally avoid a notable impact to your credit score.

Final Thoughts


Knowing the difference between hard and soft credit checks and knowing when an institution will do which allows you to make the right financial choices for yourself. The best practice is to only use hard checks when needed and, if multiple are needed, perform them in a small period of time. This practice will minimize the impact to your credit score.

Neo Secured Credit

With guaranteed approval and no annual fees you can start building your credit and earning unlimited, instant cashback.

neo secured

Author Bio

Mohamed Konate

Mohamed Konate is a personal finance expert, blogger, and marketing consultant based out of Toronto. He is a former financial services professional who worked for many years at major Canadian financial institutions where he managed the marketing strategy around various financial products ranging from credit cards to lines of credit. Mohamed is passionate about personal finance and holds a Bachelor in Business Administration from the University of Quebec (Montreal) and a Master in International Business from the University of Sherbrooke (Quebec).He is also the author of the Canadian Credit Card Guidebook. Read his full author bio