Soft and hard inquiries
Every time someone looks at your credit report, the bureau records it as an inquiry. There are two kinds:
| Soft inquiry: no effect | Hard inquiry: small, short-lived effect |
|---|---|
| Checking your own score or report | Applying for a credit card or line of credit |
| Your bank’s app or a free credit-score site | Applying for a car loan or mortgage |
| Pre-approved offers you didn’t ask for | Some requests for a higher credit limit |
| Lenders reviewing an account you already have | Some rental and phone applications |
Only you see soft inquiries on your report. Lenders see the hard ones.
How much does applying cost?
A single hard inquiry usually lowers a score by a few points, and its effect fades over the following months. Hard inquiries stay on your Equifax and TransUnion reports for a few years, but only recent ones matter much.
Several applications in a short time can look like you’re desperate for credit, so apply only when you need to. If you’re shopping around for a mortgage or car loan, do your comparing within a few weeks, and ask whether a lender’s quote or pre-approval needs a hard check.
The things that move your score far more are paying on time and how much of your credit limits you use. Missing a payment by 30 days or more does much more damage than any inquiry.
Why you should check
Checking regularly helps you:
- Spot mistakes, such as a paid-off debt still showing a balance, or an account that isn’t yours.
- Catch identity theft early, before someone opens credit in your name.
- Know where you stand before you apply for a mortgage or car loan, so there are no surprises.
You can get your credit report free from Equifax Canada and TransUnion Canada, online or by mail. Check both, because lenders don’t all report to the same bureau. Many Canadian banks also show a free score in their app; it may not be exactly the score a lender uses, but it shows the trend.
If you find a mistake
Contact the bureau that shows it, Equifax or TransUnion, and ask for it to be investigated and corrected, with any proof you have. If the error came from a lender, contact the lender too. If you think someone has used your identity, see how to spot money scams for what to do next.
More on what does move your score: credit scores explained.