What is the difference between Hard Hit and Soft Hit Inquiries?

When a lender asks for a consumer's credit report in response to an application for credit, it registers as a hard hit inquiry. The three major credit reporting agencies – Equifax, TransUnion and Experian – monitor all hard hits. The inquiry section of the credit report often contains a list of everyone who has accessed a consumer's credit report in the last two years.

How do hard hit and soft hit inquiries affect a credit report? Both hard hit and soft hit inquiries show up on a credit report. However, you should know what each inquiry is and how it affects your credit report and score.

The Hard Hit

When a you apply for credit, you are giving the lender permission to ask the credit reporting agencies for a copy of your credit report. If you apply for too many credit cards and loans in short period of time, it may have a negative affect on your credit report and score. Too many hard hit inquiries can be an indication that the consumer is desperate for credit. Many lenders may not be willing to take the risk and approve a consumer's application for credit if they have too many hard hits on their credit report.

While each credit card application is considered one inquiry, generally, home and auto loans are treated differently. It is common for a consumer to shop around for the best rates, and that requires applying for auto and home loans with different lenders. Each lender may ask for their own copy of the consumer's credit report. Although the consumer has applied multiple times for credit with these lenders, the credit reporting agency may consider the requests as one hard hit within a 14-day period.

The Soft Hit

Unlike a hard hit, a soft hit does does not have a negative affect on a consumer's credit report. Sometimes a company may request a consumer's credit report to update their contact information. The credit report is a valuable tool to debt collectors who want to update consumer contact information. Every time a debt collector, credit card company or utility request a consumer's credit report for this purpose, it is recorded on the credit report as a soft hit and not a hard hit inquiry.

For more information about a hard hit inquiry, consumers can contact any one of the three major credit report agencies. For information regarding  debt related issues, consumers can contact NCO Financial Systems, Inc. Contact information for NCO Financial Systems, Inc. can be found on every page or our  consumer help unit website.
  
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