Hard Inquiry vs. Soft Inquiry: Which is Right When Screening for Your Rental?

Tenant Check August 16, 2019
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Hard Inquiry vs. Soft Inquiry: Which is Right When Screening for Your Rental?

Checking a potential tenant’s credit score is one of the key ways to determine if they are a good financial fit. The market around tenant screening is built to make this easy.  The credit check is bundled in with other information designed to help you! But the aspect that doesn’t always get explained: how does the tenant screening impact the applicant’s credit score?

In a world where credit scores can be checked habitually, it is important to know the difference between a hard inquiry and a soft inquiry and how each impacts the applicant. Renters may refrain from applying for your property if they think and additional credit inquiry will negatively impact their credit. 

The breakdown is pretty simple.

Hard Inquiry: Does Impact Credit Score

A hard inquiry on an individual’s credit is typically done by a financial institution. Applying for a new credit card, loan, or mortgage fall in the “hard inquiry” category. Hard inquiries can be used for tenant screening but are not necessary and can linger on the applicant’s credit report. The number of points that a credit score can drop, due to a hard inquiry, will vary by individual and is based on their credit history.

Soft Inquiry: Does Not Impact Credit Score

A soft inquiry on an individual’s credit is typically a person or business is investigating someone for a background check. This is the type of credit check that occurs when an individual checks their credit score, either through a reputable site or one of the three major credit reporting agencies (Experian, Equifax, and TransUnion). Soft inquiries can be used for credit checks without an individual’s knowledge or applying for a job. It is becoming common, with the growth of online tenant screenings (like Whitepages TenantCheck), for landlords to perform a soft inquiry for rental applications if proof of employment can be verified elsewhere.