What’s a Hard Credit Check, And Why They’re Valuable

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I talk a lot about “hard” and “soft” credit pulls. I don’t think I’ve ever actually seen these terms used by FICO officials, so it may be kind of confusing. Money geek slang, who knew? A credit check, also known as credit pull or credit inquiry, is (logically) when a third party wants to examine at your credit history.

A “soft” pull is one that does not affect your credit score. You can get 1,000 of these and it won’t matter as they are not visible to other people checking your credit. These are often done without your knowledge as long as they have a “permissible purpose by law”, and may include:

  • A new credit card issuer or mortgage company wanting to send you a “pre-approved” loan offer.
  • An existing card issuer (like Citibank) checking up on you periodically to make sure you haven’t been going nuts and opening 37 other accounts.
  • An employer doing a background check before a job offer is extended.
  • You checking your own credit history and/or score.
  • A bank just verifying your identity when opening an account.

Conversely, a “hard” pull is one that does affect your credit. It is supposed to only happen when you give express permission to do so, usually when you are seeking some form of credit or insurance. It will lower your FICO score by about ~5 points temporarily for ~6 months (after which it will bounce back up), and will also be visible to future people checking your credit.

Whenever you apply for a credit card or a credit line, expect to have a hard credit inquiry. However, it has become more and more common for non-credit institutions, like banks and credit unions to perform a hard pull as well. Some will only do it if you ask for overdraft protection, which makes sense as it is basically a ~$500 line of credit combined with your checking account. Others will do it for any account opening at all. I was surprised and disappointed to see that Bank of America did a hard pull when I opened an new account with them.

Because each hard pull hurts your credit history temporarily a bit (with some exceptions), I am always very protective of my credit checks. I personally try to keep them down to about 4-5 within the last rolling six months. Probably due to this, credit card companies often feel they have to give people with above-average credit an incentive to apply for a new card. Notice how sub-prime credit cards never offer good deals?

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  1. Since I don’t expect my credit score to matter in the near future, my minimum is more like $25.

  2. That’s cool, but keep in mind you need at least decent credit to get these bonuses in the first place. After, I don’t know, about 6-8 cards in the last 6 months you’ll probably start getting turned down for additional applications.

    So at least apply for the juiciest ones first 🙂

  3. Anonymous says

    Didn’t you say (or someone say on these pages) that multiple hard credit pulls in the same two week period count as a single pull for FICO purposes? Why not just save up the offers and apply for them all at once, say every three months or so?

  4. I don’t get many hard pulls. But my opinion is that hard pulls are not an issue unless you are applying for a loan (such as a car loan or mortgage) that has an interest rate that’s based on your credit score.

  5. This is a great article! It’s very informative and I like your reasoning about the $100 benefit in return for a hard credit pull. That makes a lot of sense since it dings your score, i.e. makes borrowing from someone else more expensive.

    Are you going to submit it to the Carnival of Personal Finance? I’m hosting it next week, and I think you should.

  6. Overworm says

    Great info. Thanks.

  7. I don’t have a set value but I probably don’t go for anything under $75 of value. I do look at other things, such as the non economic factors.

    For instance, I decided to sign up for the gmac account after getting sick of hsbc’s waiting times on funds transfers. I did so even with the credit hit because I liked the features, atm, checks, easy to link to savings accounts, etc and wanted to use it as my main bank.

    That being said, if I was planning on applying for a loan for a car or house any time in the next year my standard would probably be very, very high.

  8. Great post, Jonathan. I just had to submit to a hard pull from Citi, even tho I already had a card with them. The new card’s rewards are much better than what I already have, tho, so it seemed worth it. And I think it’s my only hard pull in six months.

  9. Claire – Do you mean Citi or MBNA? Yes, if you switch card types sometimes they make you apply again.

    My 3-4 apps is not a set number, just something I decided for myself. Everyone has their own comfort levels.

  10. Anon – Multiple inquiries with a short period of time for home or car loans are lumped into one inquiry for credit score purposes (rate shopping). I don’t believe this is true for credit card applications.

    Some people do apply for multiple credit cards on the same day, in the hopes that the other credit card companies won’t be able to see the other new credit inquiries when making their approval decision.

  11. Good post.

    I actually dropped from 790-805 range to 770-780 range this year after a new card, new Scottrade account, and new apartment.

    Jonathan – Would you suggest waiting six months after a hard pull before applying for a 0% BT card? D’ya think the extra 20-30 points would have any significant effect on the credit limit you’d end up with?

  12. Dan – I am not an expert, but I don’t think so. In my experience the banks decide whether to give you the card based on your score (which seems plenty high to me), but determine the credit limit based on other things like income reported and your existing credit lines.

  13. Debt Free says

    Great Post!

  14. Overdraft protection is not limited to ~$500. Many (most?) banks can give you a overdraft credit line as high as typical credit card lines. I.e. Citibank gave me a $10,000 overdraft line.

  15. I just had a hard pull alert happen on my credit report from someone I did not authorize to do it! I am very angry because my credit score is already too low, and I have been working very hard to try to build it up because I HAVE to refinance my mortgage within six weeks. (Unfortuately, we had gotten our first mortgage with an adjustable rate interest, and the time is up on it). Every point on my credit score counts – how can I fix this? I absolutely have not applied for anything for six months or more because I did not want to affect my credit. The pull came from a collection agency from a very old student loan (that is not on my credit reporty) – 24 years old!

  16. I had a collection agency do a hard pull after they were paid. Are they allowed to do that, or are they only allowed to do a soft pull? I have never seen a hard pull without my express permission before. Is this legit? What should I do?

  17. very informative as always 🙂

  18. “Multiple inquiries with a short period of time for home or car loans are lumped into one inquiry for credit score purposes (rate shopping).”

    As a mortgage lender I can tell you that this is 100% false. Every credit pull in a short period counts as one pull. The FICO based bureaus do not care when it is pulled. Each pull will cost you an average of 2 points. It is for this reason that extensive rate shopping is a bad idea. Shop two banks, three at the most. Anymore than that and you could do serious damage to your credit. Stay away from organizations that farm you out to numerous banks because they will each pull your credit. I have seen multiple people have their credit destroyed because of these types of deals.

  19. I noticed you said that soft pulls have no affect on your credit score, but I’ve also read that checking your credit score too often can hurt your credit score. Since these are soft pulls, shouldn’t that not be true?

  20. I’ve never seen any evidence that checking your credit score too often can hurt your credit score. I’ve read repeatedly that it does not. In fact, the credit bureaus want you to check often, by buying their credit monitoring services!

  21. Thanks for the great info!!!

  22. Anne Marie says

    What are folks using to track their credit reports? I was paying 9.99 a month to Credit Expert but lots of months went by that I didn’t use it, and it only gave me an Experian report, for some reason mine are fairly different.

  23. I’ve had a couple of medical bills go into collections when I could not afford to pay. Three collection agencies called me approx 20-30 times per week. One lady called 5 times in 1 day when I had just returned home from surgery. My friend answered the phone and the angry collector yelled and threatened my friend telling her to take the phone to me even when she was told that I was recovering from surgery. The lady left harassing messages every other day of the week. I decided to change my number to a non-published one. She somehow got that number, as well as the other collection agencies. It’s truly horrible when you don’t have the financial means to pay but wish that you could…I’m one of those persons whose conscience of outstanding debt just kills me. If I had the means, I would have paid as I could. Apparently 3 of these collectors have obtained my credit report from all 3 credit agencies (trans union, experian and equifax) on numerous occassions throughout the last 12 months. Do I not have any protection from them accessing my credit reports without my knowledge or permission? Please let me know….I would appreciate it! Thank you!

  24. I am not familiar with collections but afte reading this thread I got interested in how, when and how often collection agencies can ding a credit report.

    A Google search for: ‘credit reports your rights collection agencies’ seemed to reveal a couple good places to start.



    That one contains a link to another FTC page that looks informative:


  25. I still don’t understand the basic concept of what exactly a “hard pull” does to affect a credit score. Does a hard pull go beyond the concept of “just looking?” Seems to me that any action that would negatively affect a credit rating would constitute grounds for a civil action. My credit score recently dropped from 838 to 820.. that’s 18 points!! I pay off all of my credit cards each month and have no delinquencies. What could have cause a drop of 18 points in my credit score? It seems to be rebounding, but slowly. The last time I checked it, it was 824. However, I have opened savings accounts with E*Trade and FNBO in the interim. Can I expect my credit score to take another dive?

  26. Stephanie says

    I have a question that I hope someone can answer for me. I have been doing tons and tons of research on the best Direct Savings/Money Market accounts for the past month. I finally found one that I thought was perfect.

    GMAC – (http://www.gmacbank.com)

    I decided on GMAC because it has a 5.30% APY currently, they offer checks and a check card (which was a plus for emergencies), there’s no min. balance, and although there was a min. opening balance of $50, it was still the best deal because of the high rate and check card.

    My question:

    We decided to go for it. We went through the online application, and instead of getting a “Congratulations!” or anything telling us that our account was now open, we got a page telling us to call customer service and give them our application ID number. So I did. I called and the CSR told me that it “looked” like what happened is they couldn’t get a credit reading from us. Meaning our credit wasn’t that good. (We knew that, but have never had an issue opening a bank account. Especially a savings account.) He said he would have someone (a person) actually review our credit and they would give us a call in 1-2 days and they would let us know what we needed to do to open an account.

    Can they really not give us an account because our credit isn’t good enough? We’ve always been able to open bank accounts and have pretty good history with our accounts. What can they make us “do” to open an account? And since (as was mentioned above) GMAC does a “hard” credit check, can we get anything from it because they’re hurting our credit score which probably isn’t very high in the first place? We want to buy a car soon, we need all the points we can get. I don’t know a whole lot about credit, so any light anyone could shed would be great.

    Thanks so much.

  27. How do you know when a company (bank, CC issuer, real estate agent, cell company, etc) is going to do a hard pull and do you ask them if they do soft or hard pulls?

    Is there any recourse if they say they are going to do a soft pull and execute a hard pull later

  28. Stephanie – Yes, the fact that GMAC screens based on credit is a drawback to them for sure. I’m not sure what you can get from them, but you should at least get a free copy of your credit report. You could also dispute the inquiry with the credit bureaus as they shouldn’t have done one without telling you explicitly and also they aren’t offering any credit anyhow.

    FB – It’s hard to tell with some institutions, which is why many people ask before opening an account, and why I try to tell people ahead of time when posting about a bank.

  29. Stephanie says

    Thanks for the info. They did deny us an account. After that I checked my credit report and was pleased to find that I had a “good” credit score. I had no idea. I just got my 1st credit card (to build credit) about 4 months ago and it has already improved my credit.

    Although, GMAC denied us, we decided to try ING since everyone seems to love them and had an account in 15 minutes. We also applied for the Electric Orange account which is really awesome. It gives us a check card with the checking account, and if we need that money in our savings for any reason, we can just transfer it into the EO checking account (which also gains intrest) and have access with the card.

    I think we’re going to love ING.

  30. Great post, thanks!

    Coincidentally, Citibank is offering exactly $100 to open a new account with them right now…

    Offer code CSLN, if anyone is interested. I heard about it from Poorer than you: link

  31. Paralegalus says

    My friend and I recently opened GMAC MMA’s and were concerned when we read on your blog that they conduct a hard pull for your credit score. We called them up and they kindly told us that they do not conduct hard pulls for thier MMA’s and CD’s. Thought I would share a bit of our investigatory knowledge. 5.3% APY for everyone!!! (with a good credit score)

  32. Houseostyle says

    I am about to register with scottrade.com they do a credit check – i deposit money into my account using my credit card.. would this be a hard or soft pull ?

    I am NOT BORROWING any money… Thanks

  33. I just turned 25 last month and want to shop around for car insurance to make sure I’m getting the best deal. Do insurance companies do hard or soft pulls? I have good credit, but I do want to buy a house in 6-10 months so every point counts… Thanks!

  34. Roger K. "Rog" WILSON says

    August 31, 2007

    Could you provide an analysis, or overview, of the recent offers that “promise” to pay off a mortgage in half the time, saving hundreds of thousands in interest, with no change in a person’s bill payment patterns? I know there is no free lunch, and no perpetual motion machine, and would like to understand how they can make what seem to be preposterous claims.

    Thanks, Rog

  35. brook knomow says

    this past week i applied for a third checking account just to get what i though was an instant $50 reward or $100 charitable donation from suntrust.

    that day, i saw my equifax score dropped probably about 8 points. majority of my inquiries have been submitted to equifax and 6 inquiries through them have lowered my score 20-30 points lower than transunion and experian.

    i have found a couple sites online that say that it is required for the bank to show you that you had consented to an inquiry. if not, they must remove the inquiry from your report. the branch, nor reps on the telephone believed this was true. they would not honor my request to be shown that i had consented, which i don’t believe i did.

    what was really stupid was that i was told to call equifax with my request, though i told them that obviously they would not do that, since i wasn’t the one who submitted the inquiry.

    i found an interesting site from lava marketing, that stated that there are resources for banks to check up on customer without an inquiry showing up on their credit report. also the soft pull, could suffice.

    it is clearly a lack of caring for one’s customers for banks to do this to checking or especially savings account customers where the bank is not at risk.

    some think i’m obsessed with my credit. regardless i take pride in my recovery, which other than my inquiry tainted equifax, is rated excellent.

    i did cancel my account the day after i opened it. no remorse from them or efforts to retain my account. of course i did the same thing years ago with charter cable, when i was told i would get a half month credit after about three months of timely payments and didn’t. does charter care that they have lost approximately 3000 of my dollars over the years? apparently not. hopefully enough others out there are of principle and can influence them.

    so is there a source that states that permission needs to be received on something like a savings or checking account?


  36. Does everytime I apply for a “NEW” credit card, does the financial institution do a “hard credit check”?

  37. Mr. Tlj – Yes. If not all, 99.999999% of the time.

  38. Hi. I’m a 21 year old college student with good, but not great, credit history. I was looking to get the best deal on a Sprint plan. But while reading the SERO article, I saw the link for a “hard pull.”

    Now, I’m still trying to pay off one credit card and just opened a new one (with a ~$500 limit). And I have NO intention on opening another account at all anytime soon. I have 2 savings acount very little money (with Bank of America and HSBC). I just started a job (first one ever) and I dont know if my credit, or my pockets can hold up to those “hard pulls.” But to completely understand what a “hard pull” is, can some one explain to me what process is?

    Also, I’m thinking about buying a car by the end of this year or so, and I really do NOT want any negative impact on my credit. Will some one give me some advise on what and what not to do?

  39. cyndi,

    i’m 22, started my first job july of 2007, have a car payment, student loans, and 2 credit cards and i’ve been able to keep my credit score 720+

    best advice, do your homework before anything else. don’t shop around in a way that they could do credit pulls on you.

    try not to charge more than 20% of your credit limit to any of your cards.

    spread out your debt and do NOT consolidate all of it on 1 card. better to pay down the larger sum than to put it all on the 1 card with a better rate.

    if you’re looking to buy soon, save up money because you want to try to put a decent amount of money down for your car.

    think of it this way, your credit score is lender confidence in you that you will pay back the money. the higher the score the more credit they’ll give you at better prices because they’re more confident. the best way to build credit is, like confidence, to be consisent and vigilant. never pay late, pay more than the minimum, and always try to build. ask for credit limit increases if you have a good history.

    once you apply for a auto loan, do NOT allow anyone to touch ur credit for a good 6 months. You want the credit people to see that you can handle this bit of credit they give you and not go overboard. hope this helped!

    good luck!

  40. btw glad to see i’m not the only “young’un” concerned about credit! =P

  41. Roland R. says

    I’m curious…..if I’m shopping around for an insurance quote on my car, and I get 5 different quotes, how does this impact me? I give each carrier permission to run an “insurance score”. I’m told that the insurance score is not the same as a credit score. Are you telling me…5 points x 5 carriers= 25 points for six months? So, by the time I get to the fifth carrier, I’m probably facing a higher premium than the first on score alone? Thanks!

  42. I heard that borrowing from a finance company can lower your credit score? Is this true and if so why.

  43. James in MN says

    Hey Roland,

    I just went through the same thing with car ins. They told me it was a soft hit but I havent verified that. They could have just said that cause I squirmed when they asked for my SS #

  44. INGDirect requries hard pulls for its checking account — even for existing customers. They bundle a checkcard,ATM and overdraft credit and require the hard inquiry without exception.

    I think it’s inappropriate for this customer who has balance for a year with them that are over 10 times the amount of the overdraft coverage.

    It’s a poor policy for an institution that has the ability to manage risk, but chooses the easy way out for them, but — through their lack of evaluation of their own history with the customer – penalizes the customer.

  45. I have a question, my bank (WaMu) recently sent me an offer to apply for a line of credit with them, it sounded great, low intrest rate, offered balance transfers, and so on. I assumed I would be approved because of the fact that I have had an account with them for some time. As it turns out I was not, I recieved a letter stating that they could not approve the application, in the letter it also stated that ” the decision to not offer you an account at this time will not be reported to the consumer reporting agencies”. The credit reporting agency used was Experian, Inc.
    The question that I have is: Will this affect my credit score negatively??

  46. Hello all, just trying to confirm a few things about credit scores and hard checks. When I came to college I had a chase debit card. When I was around 19 or so I found out students could get a credit card just based on being a student. So I got a chase leisure rewards credit card. I have made all payments on time. 2 years later I got an apartment and when applying for cable they told me they were going to do a credit check. When they ran the check it was declined… heres where my question comes into play. Since I had no idea what a credit check really would do to my score at that time I told the representative to “try it again” and it was declined again. I told him ok, i’ll try and figure out what was going on. I was recently 21 at the time (not sure if that has anything to do with it) and I went and applied for a free credit report online. On the report it showed my leisure rewards card in good standing for x months and at the bottom were 4 transactions I’m assuming were hard pulls. The first was probably for my credit card, I don’t remember the second, and the last 2 were showing transactions from the cable company. After not getting a direct answer I called back and he just went ahead and approved me becoming a new subscriber. In the past year I was approved for a chase freedom card (better rewards) and got that as well… both cards have been payed on time.

    I have 4 questions. First, did the cable company do hard credit checks? and if so did they have to do them (seems like he just approved me anyway)? and is there any way to remove one of the 2 that are within 10 mins of each other?

    Secondly, do those hard checks really bounce back after a time period? I just don’t like knowing I got 1 hard check for no reason.

    Third, I am considering canceling my leisure card since I really dont need it. I have heard multiple reports that canceling the oldest card is not a good thing to do for your credit? is this true? Is it ok to just cut the card up but leave it open and not spend money on it?

    Lastly, if my parents have a credit card and they got me a card with my name on it does that build my credit?

    I appreciate the help

  47. The overdraft protection on my checking account is the amount of unused credit on my master card. Isn’t all overdraft protection tied to a credit card ??

  48. Overdraft protection is often a separate line of credit, not attached to a credit card.

  49. I’m refi’ing my mortgage right now and my broker did a hard credit check and my credit score was about 15 points lower than a soft check I did just the day before. Any idea why? Will a hard check affect the score that much?

  50. L. Woods says

    In regards to the SunTrust My Cause Promotion, the deal was if you agreed to open a checking account and make at least 1 signature based purchased with your free debit card, keep the account in good positive standing you would receive a free $50 dollar gift card or a $100 donation to the charity of your choice. You did have to agree to open the checking account, you must sign for this account as well. Always read any information before signing, in that information you would find that the financial organization would verify information about you by doing a credit check. With this being said, all banks upon opening a checking account or deposit account does do a credit check. This means they will hit your credit, in return dropping your credit score.
    As for the Over Draft Protection, different banks have different types of ODP. The most common type of ODP is a savings account, the second type can be a line of credit such as an Equity Line of Credit, the third type being a credit card. You have the option of setting these up as your ODP, they do not come preset as your ODP with most financial organizations, it is your choice to use them as your ODP. Some banks have different methods of odp, you should check with your financial organization to see which type they offer and how it works and decide from there which type would best accommodate to your needs.

  51. a friend sent me a reply someone had make about the hard pull made by suntrust for opening a checking account and getting a $50 credit after one usage of debit card. enroute to being debt free, i did this about a year ago and when using daily credit monitoring, i saw that my credit was dinged, cancelled new account the next day. today i only use amazon.com card from chase, which first three months gave 2-6 points and i paid off medical bills, etc, resulting in $100 cash rewards in those three months without paying a cent interest. this month i paid off state farm policy and anything else i used to use debit card for and got $18 credit toward rewards.

  52. In regards to this statement; “I personally try to keep them down to about 4-5 within the last rolling six months.” I was shocked when I a mortgage company sent a copy of my FICO score and 2 or the 3 credit bureau’s citied I have “too many inquires within the last 12 months”, too many was 5. I only had 5 inquires within a year and to them, that was 5 too many.

    It’s just ridiculous what companies are doing now to consumers and their credit and there is not much the consumer can do. They want the economy to turn around and consumer to make purchases but how can you when every step you take leads you further down the abyss??? It’s just a vicious cycle…

  53. Pissed Frank the Tank says

    I signed up for Scottrade and I wasn’t aware they would do a hard pull. IT LOWERED MY EQUIFAX SCORE 18 POINTS!!!!!

    I closed it right away, they will not get my money when I can invest with other brokers and currently do and they didn’t pull my score.

  54. Most Banks check with Chex Systems if you are opening a Checking

    or Savings account. Suntrust is not trustable. I was also going to

    get their free offer, and an Automated Voice said “Press #1 for

    a Credit Check. Press two to decline this offer”. I declined, but they

    did a hard pull anyway. This was back in 2005.

  55. How much will my FICO score decrease due to hard pull from Alliant credit union when i open a savings account with them?

  56. Hi Jonathan,

    I just submitted I guess what you call a Hard Pull in order to increase my Citi card limit. I didnt know that it’s not a great idea.. I already had an increase like 3 months ago from $500 (thats what they initially gave me) to $1300 (this time it was instant increase – a soft pull). I only have 2 credit cards, one of them I stopped using but still active. How bad is this Hard Pull for my credit score and history?

  57. I recently dropped 19 points from my fico score. I signed up for Verizon cable service and rented a new apartment. My credit catagory has now changed just from these to inquires. I was planning on applying for a cash loan which I assume is out of the question now

  58. Eight years ago, after my husband had a disabling accident we were forced to file bankruptcy. I worked my tail off for the next seven years to get our scores up again and finally succeeded in having scores consistently above 700. Then, through no fault of my own, I had a sudden income reduction of $550 per month. Although I was still able to pay my full mortgage on time and I tried to work with creditors, it didn’t matter. My credit was destroyed in just three months when I was very late on several bills. It seems very unfair that after seven years of consistently paying on time and building up credit, they can destroy your score in a few months. I give up. I have now gone back to school full-time and taken my phone off the hook. Maybe when I am done with school and making more money I can fix it again. But it really seems wrong for a credit score to be able to be destroyed so quickly when a financial crisis happens.

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