The Difference Between Hard and Soft Credit Checks

Appfolio Websites • March 18, 2021

(from apartments.com /Author: Jacob Margle)

Credit checks are an important part of tenant screening and a best practice to ensure you put the best renters possible in your unit. By running a credit check on a prospective tenant, you can learn a great deal about their rental history, including whether or not they owe money to a previous landlord. No one wants to be put in a situation in which rent becomes backlogged. However, which kind of credit check you perform will tell you varying degrees of information. As a landlord, you’ll be faced with running either a hard or soft credit check and understanding the difference.

What Is a Hard Credit Inquiry?

A hard credit inquiry is what you can expect when applying for a credit card, a mortgage loan, or any other type of loan. Hard inquiries need to be performed with the permission of the tenant or applicant, and since it’s tied to a credit application, credit bureaus assume it’s tied to a new line of credit or a loan. This means that a hard credit inquiry will negatively impact the tenant’s credit score. Hard inquiries can also reveal a bit more information than a soft inquiry will, such as credit utilization rates and other factors that give you a more complete picture of a tenant’s credit history.

A hard credit inquiry should only decrease an applicant’s score by five points or so. It is important to note that this impact will stay on their credit report for about two years, so while the impact isn’t much, it is something the tenant will have to work with for at least two years.

Examples of a hard credit inquiry

Mortgage applications. Applying for a major loan for something like a mortgage will trigger a hard credit inquiry by the lender
Auto loans. Auto loans are another major loan people take out during their life. Like a mortgage, this will trigger a hard inquiry
Student loans
Credit card applications. Not a loan, but since this comes with the presumption that the applicant will have another line of credit, it necessitates a hard inquiry
Apartment rental applications

What Is a Soft Credit Inquiry?

A soft inquiry is named so because it makes virtually no impact on one’s credit score. Soft inquiries are requested by the applicant or tenant themselves, typically when viewing their own credit report. Because these types of inquires aren’t tied to a line of credit or loan, there’s no impact on one’s score.

Soft credit scores aren’t always requested by the consumer. Potential employers and landlords can view a soft credit inquiry with the permission of the applicant. This is advisable for landlords, since multiple hard credit inquiries have the potential to lower an applicant’s score more than once. Consider asking your potential tenants to send you a soft credit inquiry report rather than going the hard route.

Examples of a soft credit inquiry

Checking your own credit score. Companies like Credit Karma perform a soft inquiry.
Employer screenings. During a background check for a job, your potential employer may perform a soft credit inquiry.
Prequalified credit card applications
A current creditor checks your credit. Your credit card company or lender may perform a soft credit check at any point

Credit Inquiries Can Be Situational

Not every type of credit inquiry situation is clear cut. Some requests that would result in a soft inquiry the majority of the time can end up triggering a hard credit inquiry, and vice versa. When it comes to rental applications, whether your tenants will be subject to a hard or soft credit inquiry depends on what service you use.

Third-party screening companies almost always use hard inquiries, but dealing with an applicant directly can result in a soft credit inquiry.

Examples of situational inquiries

Renting a car. Reserving a rental car with a credit card can result in a soft inquiry, while reserving one with a debit card may result in a hard inquiry.
Opening a checking or savings account
Cell phone, TV, or internet service agreement
Utility service agreement

If You Choose a Hard Credit Inquiry…

If you decided to pull a hard inquiry on a prospective tenant, the tenant will have their credit score decrease by around five points. This impact will remain on their credit report for two years, and an accurate hard inquiry can’t be removed from a credit report. It’s also worth noting that most of the time, a series of hard inquiries (whether it be from rental applications or something else) will be counted as a single inquiry, but it’s not uncommon for each pull to affect an applicant’s score individually. The impact of a hard credit score also lessens over time, so renters won’t see as drastic of an impact as time goes on.

When you list your rental on Apartments.com, you get access to credit reports as part of Rental Tools, making pulling credit reports on tenants easy.

If You Choose a Soft Credit Inquiry…

Choosing a soft credit inquiry means you will have to work more closely with a tenant since they have to give you or the screening company permission to view their credit report. The benefit is that your applicants won’t have their score affected by the inquiry. If applicants know that you require a soft credit check up front, they may be more inclined to apply and you can enjoy a bigger pool of applicants. And if you reject a tenant, they won’t have taken as big of a credit score hit when they apply somewhere else.

The Choice Is Yours

Whether you decide to perform a hard or soft credit inquiry is up to you, just know how it impacts your potential tenants before you proceed. A hard inquiry will typically reveal more information about that person’s credit history, but they’ll take a small hit on their credit score. A soft inquiry won’t affect a tenant’s credit score, but it can slow down your screening process since you need the permission of each applicant to view a soft inquiry.

Remember that credit is only partial picture of a tenant, and that you can rent to tenants with bad credit. If you’re unsure, start with a soft credit check. For most tenants, a soft inquiry will give you a relatively complete picture and it’s a great way to start your landlord-tenant relationship off on a positive note.

< Older Post Newer Post >

Share this post

Is Homeownership Really Out of Reach for All First-Time Buyers… or Does It Just Feel That Way?

By The Lighter Side of Real Estate • May 31, 2026

If you’ve been wishing you could buy your first house, there’s a good chance the headlines are making you feel like it’s probably close to impossible. And to be fair, it’s not easy for a lot of first-time buyers who don’t have the advantage of equity from a previous home. Prices have gone up. Rates aren’t what they used to be. And rent hasn’t exactly been giving anyone a break either, which can make saving for a down payment feel like an uphill battle. It’s also pretty rare to hear anything that pushes back on that perspective. The overwhelming message is that housing is unaffordable, that first-time buyers are getting squeezed out, and that something needs to change to make it more accessible. So even if you’re doing pretty well financially, it’s not surprising if it still feels like buying a home is out of reach. It’s easy to assume you’re not in a position to buy simply because it feels like no one is. But it might not be a bad idea to test that assumption. Why It Might Feel Like You’re Further Behind Than You Are A recent article on Realtor.com touched on something called money dysmorphia. It’s a pretty simple idea. It’s when your perception of your financial situation doesn’t quite line up with reality. In other words, you might be doing better than you think, but it doesn’t feel that way. And that feeling can be influenced by a lot of things: What you see your peers posting on social media. What you hear from friends or coworkers. Or perhaps the constant stream of headlines talking about how expensive homes are. It can create this sense that everyone else is either way ahead of you… or that nobody can afford anything at all. On one hand, it can make you feel like you’re falling behind compared to what you see others doing. On the other hand, it can reinforce the idea that buying a home just isn’t realistic right now… even if your situation might suggest otherwise. Most people probably aren’t even aware that’s happening to them, so they don’t really question it. But now that you are, here are a few questions you might want to start asking yourself. Is it possible I’m actually in a position to buy a home? It might sound like a simple question, but it’s one a lot of people never seriously ask. If you’ve already assumed the answer is no, you may be skipping over the possibility that things aren’t as out of reach as they feel. What’s the worst that could happen if I try to find out? You’re not committing to anything by exploring your options. At worst, you confirm you’re not quite ready yet. At best, you realize you’re closer than you thought. What would I need to do to get a clear answer? This usually isn’t as complicated as it sounds. A quick look at your finances and a conversation with a lender can give you a much more accurate picture than guesswork or headlines. What if the answer is yes? That doesn’t mean you have to rush out and buy something tomorrow. It just means you have options—and you can start thinking about timing, strategy, and what makes sense for you. What if the answer is no? Even if you aren’t in a position to buy a house, at least you’ll get a feel for what you need to do to get yourself in a position to do so. Whether it’s saving a bit more, paying down debt, or improving credit, you can move forward with a plan instead of an assumption. Once you’ve worked through those questions, there’s really only one way to find out where you stand… and that’s to speak with a mortgage professional. Ideally, you’ll want someone who works with first-time buyers and is willing to walk you through things without making it feel overwhelming. They can guide you through the pre-approval process, which will give you a clear picture of whether you’re currently in a position to get a mortgage—or what you need to do to get there. A great way to find the right mortgage professional is to ask a local real estate agent for a recommendation. And while you’re at it, starting a relationship with an agent isn’t a bad idea either. Whether you’re ready now or further down the road, they can be extremely helpful in getting you from where you are today to where you want to be. The Takeaway: If you’ve been feeling like buying your first home is out of reach, you’re not alone. Between rising prices, higher rates, and constant headlines about affordability, it’s easy to assume it’s just not possible right now. But sometimes that feeling has just as much to do with perception as it does with reality. Due to something called money dysmorphia, it’s easy to underestimate where you stand financially, or assume you can’t afford something without ever really looking into it. Having a quick conversation with a mortgage professional can give you a much clearer picture. You may find you’re closer than you think… or at least know exactly what steps to take to get there.

What Most Veterans Don't Know About Their VA Home Loan Benefit

By KCM • May 29, 2026

What Most Veterans Don't Know About Their VA Home Loan Benefit Nearly half of Veterans (49%) feel homeownership is currently out of reach, according to a recent survey from NewDay USA. But many are closer than they think. And you might be, too. If you’re a Veteran, you probably know the Veterans Affairs (VA) home loan benefit exists – it's been around for over 80 years. What you might not know is what it actually covers. Three misconceptions trip up Veterans the most (see graph below): Any one of those beliefs could be holding you back. Let’s walk through all three, so you have the information you really need. You May Not Have To Put Any Money Down The potential to put zero money down is probably the biggest perk of a VA loan, but most homebuyers don’t even realize that’s an option. According to the NewDay USA survey, many respondents guessed they’d need to save somewhere between $10,000 and $19,900 before they could buy. That’s years of saving for an upfront cost that isn’t always required. You May Have Lower Closing Costs According to the Department of Veterans Affairs , with VA loans, there can be limits on the types of closing costs buyers have to pay. That means more money stays in your pocket on closing day – and you have less to save up for before you can buy. The benefit combined with the down payment perk can speed up your buying timeline. Your Monthly PMI Costs Could Be $0 Unlike many other loan options, VA loans typically don’t require private mortgage insurance (PMI), even with low or no money down. If you take out a conventional loan instead, you could pay $100 to $300 a month in PMI until you hit 20% equity, according to NewDay USA. Over time, that’s a difference of thousands of dollars. Your BAH & BAS May Help You Qualify for More If you’re on active duty or if you’re a qualifying reservist, your Basic Allowance for Housing (BAH) and Basic Allowance for Subsistence (BAS) may count toward income qualification on a VA loan. So, if you were running the numbers without factoring your BAH or BAS in, you could qualify for more than you thought. Both BAH and BAS are non-taxable, so they can help raise the amount you can qualify for. Bottom Line VA home loans can put homeownership within reach, and a trusted lender can help make sure you understand the details before you move forward. If you’re active duty, you’ve served, or know someone who has, connect with a trusted lender who can walk you through whether you’d qualify and what the VA benefit offers. You may be able to buy a home sooner than you thought.

Stay or Sell? How To Make the Right Call as You Age

By KCM • May 24, 2026

Stay or Sell? How To Make the Right Call as You Age At some point, as you start thinking about the years ahead , this question tends to come up: “Could I stay here long-term… or would it make more sense to move?” It’s not always urgent. It often shows up in small moments, like going up and down the stairs, keeping up with the maintenance, or just thinking about what the next chapter of your life might look like in this home. And for most people, the answer is simple. They want to stay. The USC Leonard Davis School of Gerontology found about 90% of adults over 65 prefer to stay in their homes as they get older (see below): But even if staying feels like the right answer, it’s still worth thinking ahead about what that might actually look like. That’s where the right agent can really help. What You Need To Plan for If You’re Staying in Your Home Aging in place is definitely possible. But it’s better if you have a plan. And here’s why. The home that once worked perfectly may need to change with you over the years. And it’s easier if you can anticipate those expenses. Sometimes that means small updates: like adding grab bars in the shower. Other times, you’ll have to make bigger decisions: like reworking layouts or moving key spaces to the first floor. Some of those changes are going to be simple. Others can be a meaningful investment. And that’s why thinking about it early matters. Not because you need to decide anything right now, but because it gives you time. Time to understand what your home may need. Time to explore your options. Time to find the right contractors. Time to space out the expense of the upgrades. According to ElderLife Financial, here's a rough baseline of what it could cost depending on what needs to be done (see below): And don’t worry. If your heart is really set on staying, but the costs feel like a concern, it helps to know you have options. Depending on your situation, there may be financial assistance programs available, along with tools like home warranties to help manage unexpected costs. Just remember, if you’re thinking about making updates, it’s always worth having a quick conversation before you start. A real estate agent can help you understand which changes tend to make sense for your situation and how they may impact your home’s value based on your local market. When Moving Might Make More Sense But staying isn’t always the best fit for every situation. According to Pegasus Senior Living: “While most seniors hope to age in place, practical considerations sometimes make selling a home the wiser choice.” Sometimes, it comes down to a simple shift: when the home that once made life easier, starts to make it harder. That might look like: Maintenance or yardwork that's starting to feel overwhelming Stairs or layouts that are getting harder to manage day-to-day Or needing more support or care or being too far from loved ones And sometimes, it’s not about necessity at all. It’s about lifestyle. Some homeowners just don’t want to live through major renovations. Others are ready to simplify, downsize , or move somewhere that better fits this next chapter, whether that’s a smaller home, a 55+ community, or a place closer to family. For them, moving simply means making daily life easier. Bottom Line There’s no one-size-fits-all answer here. Some people stay and make updates. Others move to simplify things. Either can be the right choice. The goal isn’t to pick one today. It’s to understand your options early, so when the time comes, you feel confident instead of rushed. And if you ever want a sounding board to think through what the future could look like for you, let’s connect.