{"id":45906,"date":"2024-04-10T14:48:53","date_gmt":"2024-04-10T18:48:53","guid":{"rendered":"https:\/\/hardbacon.ca\/non-classifiee\/credit-checks\/"},"modified":"2026-08-25T17:09:12","modified_gmt":"2026-08-25T21:09:12","slug":"credit-checks","status":"publish","type":"post","link":"https:\/\/hardbacon.ca\/en\/credit-score\/credit-checks\/","title":{"rendered":"Soft vs Hard Credit Checks in Canada: What You Need to Know"},"content":{"rendered":"\n

Did you know the subtle difference between a soft vs hard credit check is crucial if you want a good credit score? That’s because the way someone accesses your credit file can actually lower your score. Yikes! You need to watch out for that because your credit score<\/a> is your passport to better interest rates, lower premiums, and maybe even your dream job. It informs financial institutions how well you handle credit, which is another term for a loan you take out using other people\u2019s money. <\/p>\n\n\n\n

The truth about hard credit checks<\/h2>\n\n\n\n

A hard pull or “hard credit check” is typically done when a lender makes a credit inquiry because you applied for something like a personal loan<\/a>, a mortgage or a credit card. When that happens, the lender requests information from a recognized credit bureau in Canada. The credit bureau shares data with the person or the financial institution after ensuring their credibility. In Canada, the credit bureaus are Equifax and TransUnion<\/a>. <\/p>\n\n\n\n

However, you can always check your credit file to see which financial institution or lender has checked your creditworthiness. Usually, credit inquiries remain on your credit report for up to two years. Of course, a lot of banks and apps let you check your credit score for free<\/a>, but they are not reporting agencies.<\/p>\n\n\n\n

Does a hard credit check hurt your credit score?<\/h2>\n\n\n\n

When the lender conducts a hard credit check, it will almost always have some sort of impact on your credit score. People with very good credit will likely see only a few points come off, and their credit score will rebound quickly. Those will lower scores may see more points come off and their score could take a little longer to recover.<\/p>\n\n\n\n

If you notice a significant decline in your credit score, it most likely has to do with how many hard credit checks you’ve had within a certain period of time. A hard credit check will be recorded as an Inquiry on your credit report and will stay there for up to 36 months<\/a>. <\/p>\n\n\n\n

If you apply for multiple loans or credit products in a shorter period of time, it can have a very negative impact on your credit score. Lenders consider it a red flag that indicates you may be experiencing financial distress and desperate for credit. Because it’s a red flag for potential trouble, it lowers your credit score.<\/p>\n\n\n\n

What\u2019s a soft credit check? <\/h2>\n\n\n\n

A soft credit check impacts your life in a lot of ways but it does not impact your credit score. Soft credit checks let lenders and other interested parties analyze your credit too but for different reasons. <\/p>\n\n\n\n

Unlike hard credit checks, soft checks are not used to calculate your credit score by Equifax or TransUnion<\/a>. This means your credit score will remain unchanged when a lender performs a soft credit check because you did not apply for lending or credit. <\/p>\n\n\n\n

For example, a soft credit check is what happens when you check your own score for free via applications like Borrowell<\/a>, ClearScore<\/a>, or your bank. A soft check can help you prequalify for a specific type of loan or a line of credit. When you actually apply for that product, you will need to submit to a hard credit check.   <\/p>\n\n\n\n

Preapproved loans & credit card offers<\/h3>\n\n\n\n

Ever wonder why you get junk mail from some lenders and credit card companies? You are suddenly pre-approved for something? It makes a lot more sense now. A soft credit check might be the answer. These checks are signals to lenders, rental companies, landlords, banks, and even potential employers. They might like your profile and want your business.<\/p>\n\n\n\n

Do soft credit checks appear on your credit file for others to see?<\/h3>\n\n\n\n

Yes. A soft credit check is visible on your file, but it does not<\/em> affect your credit score or scare off other lenders. Furthermore, a lender can do these checks without asking for your consent or permission. As Hardbacon has told you before, your credit score can affect your premiums for insurance policies. <\/p>\n\n\n\n

When you get hired for a new job, your employer could make a soft inquiry to evaluate your credit history too. The same principle applies to renting a place to live. Your landlord can do a soft credit check, called a rental credit check<\/a>, to see if you can handle the rent payment and how reliable you are to pay it as agreed.<\/p>\n\n\n\n

How much do hard credit checks impact your credit score? <\/h2>\n\n\n\n

Not all hard credit checks affect everyone the same. A hard credit check could cost one person up to five points. For others, a hard credit check may lower their credit score up to ten points or more. It is never a one-size-fits-all situation. <\/p>\n\n\n\n

The impact of a hard credit check depends on how many you have in a short period of time, and how strong or weak your credit score is to begin with. If you have a strong credit score, the impact is negligible, and won’t affect your creditworthiness. In most cases, the credit score rebounds to where it was as soon as the person makes their next scheduled debt payment on time<\/p>\n\n\n\n