When it comes to credit inquiries, there are two main types: hard and soft. A hard inquiry occurs when a lender or financial institution reviews your credit report in response to an application for credit. The credit application process could be for a credit card, loan, mortgage, or even a cell phone contract. These types of inquiries can have an impact on your credit score and stay on your report for up to two years.


On the other hand, a soft inquiry occurs when you or a business performs a routine check of your credit report. This can include employers checking your credit before offering employment or even when you check your credit score. These types of inquiries do not have an impact on your credit score and do not stay on your report for very long.


Understanding the difference between these types of inquiries and how they could affect your credit score is essential. Knowing this information can also help you determine when it may be wise to apply for credit, as multiple hard inquiries in a short period can lower your score. You can control your credit health by staying informed and making intelligent financial decisions.