You're shopping a business line of credit. Four lenders show up in your inbox after you fill one form. Each one wants to "pull your credit." Before you click yes on any of them, understand which pull they mean. Only one of the two costs your score real points.
The two inquiries, defined
A soft inquiry (soft pull) is a credit check that doesn't require you to be formally applying for anything. The credit bureau delivers your file to whoever requested it — the lender, the matching marketplace, a background check firm — but the inquiry itself is invisible to other lenders. Your FICO score does not move. Not by a point.
A hard inquiry (hard pull) is a credit check that only happens because you're formally applying for new credit. It shows up on your report, visible to everyone who pulls you for the next 24 months, and it drops your FICO score. Typically 5 points, sometimes up to 10 if your file is thin.
Which is which, by situation
- Pre-qualification tools (including this site, Credit Karma, every "what's my rate" quiz): soft pull. No score impact.
- Checking your own credit at my.annualcreditreport.com, Credit Karma, Experian direct: soft pull. No score impact.
- A matching marketplace shopping your file to lenders: soft pull. No score impact (this is us).
- A specific lender making a credit decision on you: hard pull. Score drops ~5 points.
- A credit card application: hard pull. Always.
- An auto loan or mortgage application: hard pull. Always.
- A rental property application that pulls credit: usually soft, sometimes hard — ask.
- An employment background check: soft pull (employers aren't allowed to hard-pull).
- Insurance quote: soft (no score impact).
The rate-shopping loophole
FICO treats multiple hard pulls for the same type of loan (mortgage, auto, student) inside a short window (14–45 days depending on FICO model) as one inquiry. So shopping three mortgages in two weeks costs you about 5 points total, not 15.
This loophole does NOT extend to credit cards or to business loans. Three credit card applications in two weeks = three hard pulls = roughly 15 points off.
The loophole is why a marketplace that uses a soft pull up front — like ours — is strictly better than applying to each lender one by one. You see six real offers for zero score impact, then do a single hard pull with the winning lender.
How long a hard pull hurts
A hard pull drops your score for the full 12 months it is "new," then fades through month 24. After month 24 it falls off your report entirely. So the pain is mostly in year one; by year two it's background noise.
Multiple hard pulls in a short window (outside the rate-shopping exception) are the real score killer. That's why credit-card churners' scores dip 30–60 points during a heavy application season.
How to never be surprised
Before you click "submit" on any credit application, ask one question in plain English: "Is this a hard pull or a soft pull?" Any legitimate lender will tell you. If someone dodges the question, walk.
On our platform, every step tells you: the pre-qualification is soft. The lender you accept an offer from — they will run their own hard pull then, with their own separate authorization. Your score is untouched until you say yes to one specific offer.