Soft Inquiry
A soft inquiry happens when someone looks at a credit report for information only. Numerous individuals check their own credit to stay on top of their finances. Companies also perform soft inquiries as part of background reviews. These checks do not change a credit score. They are simple, safe, and common in Canada. This guide explains what a soft inquiry is and why it matters.
What “Soft Inquiry” Means
A soft inquiry is a type of credit check that does not affect a credit score. Many people search for “What is a soft inquiry?” This is when they want to understand why a credit report changes. A soft credit check occurs when someone reviews their own credit or when a company checks it for information only. These checks happen in the background and leave no harm behind. They are different from hard inquiries, which occur when someone applies for a loan, a credit product, or another form of borrowing.
Soft inquiries help companies confirm a person’s identity or gather basic financial facts. They are private and only appear on the credit report of the person being checked. No outside lender sees soft inquiries. This protects the borrower’s credit standing and keeps personal details secure.
Soft Inquiry vs. Hard Inquiry
Understanding soft vs hard inquiry types helps people make smart credit choices. A soft pull takes place when:
- You check your own credit report online
- A company prequalifies you for a loan offer
- A business reviews credit for a background check
- A financial service screens your profile for identity checks
A hard inquiry happens when you apply for a loan, a credit card, or another borrowing product. Hard inquiries can lower a credit score for a short time. Lenders review them to see how often someone applies for credit. A soft inquiry does not lower a credit score. It also does not show up for lenders when they check a report.
Knowing the difference helps people avoid surprises during the loan process. It also keeps them informed about how credit report inquiry types work in Canada.
How Soft Inquiries Work
Soft inquiries happen quietly in the background. They can be triggered by:
- Reviewing your credit through Equifax or TransUnion
- Using an online tool to look at credit score changes
- Getting prequalified for a loan
- Having an employer request a background check
- Signing up for credit monitoring services
These soft credit checks give a person or company general insight. They do not show full borrowing details in every case. They also do not impact the credit score that lenders see when reviewing applications.
In Canada, people can check their credit report for free. This is a soft inquiry. It is one of the best ways to learn how your credit score in Canada changes over time. Soft inquiries also help protect against errors or fraud. When a person checks their own credit often, they can spot issues early.
Does a Soft Inquiry Affect Credit?
People ask, “Does a soft inquiry affect credit?” The answer is simple: no. Soft inquiries do not impact the credit score at all. They create no penalties. They do not lose points. They also do not count as borrowing behaviour.
This makes soft inquiries a safe way to check important information. Employers, landlords, and companies use soft inquiries when they need to confirm identity or financial background without affecting the person’s credit report.
Why Soft Inquiries Matter
Soft inquiries help Canadians stay informed. They allow people to:
- Review their credit history
- Track credit changes
- Confirm personal information
- Prepare for future loan applications
- Catch mistakes on a credit report
A soft credit check means simply: it is a look at credit with no impact on scoring. Canadians benefit from regular credit report reviews. This practice helps protect budgets, banking, and future borrowing needs.
Loan Requirements in the Context of Credit Checks
When someone applies for a payday loan, lenders typically do not use hard credit checks. They focus on income and banking history. Borrowers may need:
- One piece of Government Picture ID
- Pre-Authorized Debit Form (PAD)
- 30–60 Day Bank Statement
- Proof of Address
- Most recent Pay Stub (if income is not direct deposit)
Even though payday lenders do not use a hard inquiry, borrowers should still understand soft inquiries and how their credit report works.
Provincial Availability for Payday Loans
Short-term loans, including payday loans, are available depending on the province:
- In-store: Alberta, British Columbia, Nova Scotia, Saskatchewan
- Online only: Manitoba, New Brunswick, Newfoundland & Labrador, Ontario
- Not available: Quebec, PEI, or territories (Yukon, Northwest Territories, Nunavut)
Each province sets its own regulations. Borrowers should check with their local store before agreeing to a loan term.
Everyday Examples of Soft Inquiries
Here are some simple examples that show how soft inquiries work:
- Checking your own credit score on a phone or computer
- Receiving a prequalification offer based on a soft pull
- An employer running a credit background review
- A bank sending a promotional offer
- A financial tool scanning your credit for changes
Each example shows a soft credit check at work. These checks give information without affecting the person’s credit score.
Credit Tips for Canadian Borrowers
Canadians can protect their credit by:
- Reviewing their credit report often
- Learning the difference between soft and hard inquiries
- Keeping track of new accounts and loans
- Reporting errors right away
- Staying aware of how lenders use credit reports
These habits make credit management easier. They also help support better money decisions over time.
Getting Extra Cash When Needed
Some people face months where money runs short before payday. When this happens, they may explore short-term loan options. These loans can provide quick cash for sudden costs, such as car repairs or household needs. Borrowers should plan repayment carefully and take only what they can repay by their next paycheque.
Summary
A soft inquiry is a simple credit check that does not affect a credit score. It helps people stay informed and feel confident about their financial history. Soft inquiries differ from hard inquiries because they do not impact scoring and are only visible to the person reviewing their own report. Understanding these credit report inquiry types helps Canadians borrow wisely and protect their financial information.