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Before applying for or checking your credit, it’s important to find out whether it will be recorded as a hard check or soft check, as a hard check could lower your credit scores.
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 check?
A hard check 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 check will be recorded.
Hard inquiries can negatively impact your credit scores 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 check?
A soft check 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 scores. This means that requesting your credit score or report from Credit Karma counts as a soft check and doesn’t affect your credit scores.
How long does each check 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 check.
On the other hand, soft inquiries only appear to you and the entity that made the request.
What effect can a hard check and soft check have on my credit scores?
Hard inquiries can lead to your credit scores dropping by several points, and there could be an even bigger effect on your credit scores 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 check isn’t likely to make a big impact on your credit scores.
Is there anything I can do if I don’t recognize a hard check or didn’t authorize it?
Before applying for or checking your credit, it’s important to find out whether it will be recorded as a hard check or soft check, as a hard check could lower your credit scores.
Here are some other key differences between hard checks and soft checks, along with some examples of when they may occur.
What’s a hard check?
A hard check 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 checks, depending on who’s checking your credit.
Before giving a company permission to review your credit, ask how the check will be recorded.
Hard checks can negatively impact your credit scores 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 checks by only applying for credit when you’re serious about it.
What’s a soft check?
A soft check 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 checks:
- 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 checks DON’T impact your credit scores. This means that requesting your credit score or report from Credit Karma counts as a soft check and doesn’t affect your credit scores.
How long does each check stay on my credit report?
Hard checks can stay on your credit report for three to six years, depending on the credit bureau recording the hard check.
On the other hand, soft checks only appear to you and the entity that made the request.
What effect can a hard check and soft check have on my credit scores?
Hard checks can lead to your credit scores dropping by several points, and there could be an even bigger effect on your credit scores 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 check isn’t likely to make a big impact on your credit scores.
Is there anything I can do if I don’t recognize a hard check 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 check or hard check. 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 you find an unauthorized or inaccurate hard check in your report, you can file a dispute with the credit bureau and request that the check be removed.
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 checks 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.