What Is A Soft Inquiry And How Does It Affect Your Credit Report?

We explain a soft inquiry on your credit report.

A hard inquiry happens when you apply for a new line of credit, such as a credit card or loan. A creditor will request to look at your credit file to help determine how risky it is to lend to you!

Finding out about your credit report, and discovering what soft inquiries mean, will help you make better decisions about your finances.

How does a soft inquiry work?

A soft inquiry may occur if someone checks your credit report but you didn't submit a new application for credit. Soft inquiries aren't an indicator of greater risk and thus don't affect your credit scores.

How do soft inquiries affect credit scores?

There is no standardised formula for calculating credit scores. Often, your credit score is based on data in your credit report and whether or not you paid off and/or used up all of your available credit. Typically, the effect of any one payment history item on a scoring model is considered to be low. One should also note that, incidentally, information related to enquiries usually tends to be implicitly ignored by scoring models anyway. For example, if it so happens that multiple recent hard inquiries have appeared on your credit report within the last 12-months period, this could have a negative outcome.

Check your credit report

If you've ever checked your credit report and found a "soft inquiry" listed, you might be wondering "what is a soft inquiry and how does it affect my credit report?" Since soft inquiries do not affect your credit score, they're often made without your knowledge.

For more information on understanding your credit report, contact Credit Health.