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What's the difference between a hard inquiry and a soft inquiry?

By Sean Cooper

Before applying for or checking your credit, it's important to find out whether it will be recorded as a hard inquiry or soft inquiry, as a hard inquiry could lower your credit score.

Here are some other key differences between hard inquiries and soft inquiries, along with some examples of when they may occur.

What’s a hard inquiry?

A hard inquiry is typically recorded on your credit report whenever a lender reviews your credit when you apply for a credit card, loan or mortgage.

However, if you apply to rent an apartment or apply for a job and there’s a subsequent credit check, these may be counted as hard inquiries, depending on who’s checking your credit. 

Before giving a company permission to review your credit, ask how the inquiry will be recorded.

Hard inquiries can negatively impact your credit score and they can remain on your report for three to six years.

Applying for a lot of credit in a short time span can indicate to lenders that you're in financial trouble or desperately seeking credit. Try to limit the number of hard inquiries by only applying for credit when you're serious about it.

What’s a soft inquiry?

A soft inquiry typically occurs when you or a third party reviews your credit for non-lending purposes. This could occur when you review your own credit, a company offers you a new product or service, or a company where you have an existing account needs to verify your credit. According to TransUnion Canada, the following situations may also trigger soft credit inquiries:


  • Applying to rent a home
  • Applying for a job
  • Applying for insurance


Your credit card provider might verify your credit when deciding to offer you a credit limit increase or promotion.

It’s key to note that soft inquiries DON’T impact your credit score. This means that requesting your credit score or report from Credit Karma counts as a soft inquiry and doesn’t affect your credit score.

According to Arthur Lam, consumer and verification verticals leader for Equifax Canada says, "A soft inquiry is visible only to the individual and the entity that made the request."

How long does each inquiry stay on my credit report?

Hard inquiries can stay on your credit report for three to six years, depending on the credit bureau recording the hard inquiry.

On the other hand, soft inquiries only appear to you and the entity that made the request.

What effect can a hard inquiry and soft inquiry have on my credit score?

Hard inquiries can lead to your credit score dropping by several points, and there could be an even bigger effect on your credit score if you have few credit accounts or your credit history is short (for example, if you're a student or a new immigrant to Canada).

That being said, one hard inquiry isn't likely to make a big impact on your credit score.

Is there anything I can do if I don't recognize a hard inquiry or didn't authorize it?

Before giving permission to a third party to do a credit check, it's a good idea to ask whether it'll be recorded as a soft inquiry or hard inquiry. When signing a contract, read it thoroughly; sometimes you can provide consent to check your credit without even realizing it.

It's also a good idea to get a free copy of your credit report at least once a year and review it to ensure it's accurate. You can request a copy of your credit report from Equifax and TransUnion by mail or fax by completing a form and providing two pieces of identification.

You can also review your TransUnion credit report for free at Credit Karma.

"If there’s something on your [credit] file you don’t recognize or believe you didn't authorize, your first step should be contacting the inquirer. This is why the inquiry posted includes the name of the entity and a contact number," Lam says.

It may be a mistake, or you may have signed a contract where the permission for a hard inquiry was hidden in legal language.

If you aren't having any luck with the third party, contact the credit bureau that recorded the hard inquiry to dispute it.

You can correct errors and dispute inaccuracies on your credit report with Equifax by completing and submitting a Consumer Credit Report Update Form.

Likewise, you can dispute hard inquiries with TransUnion by downloading and completing an Investigation Request Form.

You can also call both of their toll-free phone numbers to discuss in further detail.

When hard inquiries and soft inquiries could occur


Still have questions? Contact us.