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.

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When Buying a Home Feels Out of Reach, Some Families Do This Instead

By KCM • April 30, 2026

When Buying a Home Feels Out of Reach, Some Families Do This Instead For a lot of people, the math on buying a home just doesn’t really work right now. Maybe that’s how it feels for you too. You look at the cost of buying . Then you look at the cost of childcare. And it starts to feel like you have to choose one or the other. But some families are finding a way to make both work by doing something a little different: teaming up to purchase a multi-generational home . One Reason This Is Becoming More Common It’s no secret that affordability has been a challenge in recent years. But for families with young kids, there’s an added layer that can make it feel even harder: childcare. According to the Department of Health and Human Services, childcare should take up no more than 7% of your monthly income. But in reality, the average married couple spends closer to 10% (see map below): When you combine that with the cost of buying a home, it’s easy to see why things can feel stretched. That’s exactly why more families are starting to rethink how they approach both. The Solution More People Are Turning To: Multi-Generational Living One option gaining traction? Multi-generational living. That’s when parents, grandparents, or other relatives buy a house together and live under the same roof. And it’s not just about convenience anymore. It’s becoming a go-to strategy. You can see it in the data . According to the National Association of Realtors (NAR), almost 1 in 7 homebuyers (14%) bought a multi-generational home in 2025 (see graph below): And for the first time, childcare is showing up as a key reason why they chose this option. As NAR explains : “This year’s report features two new primary reasons for purchasing a multi-generational home: grandchildren living in the home (12%) and to help reduce the cost of childcare (6%).” Why It Works Buying a multi-generational home solves two big challenges at the same time. First, it shares the financial responsibility . If you pool multiple incomes together, you may be able to afford a home you couldn't have on your own. Second, it can also solve the childcare puzzle . When grandparents or other relatives live in the home, they may be able to help with daily care – which can significantly reduce or even eliminate daycare costs. And for many people, that combination is what finally makes their move possible. If the costs of childcare and housing together have made buying feel out of reach right now, it may be worth exploring creative options like buying a home with your loved ones. Bottom Line If you want more information on multi-generational homes, let’s have a quick conversation about what’s available in our area. Sometimes the path to homeownership isn’t doing it alone. It’s doing it together.

Thinking About an Adjustable-Rate Mortgage? Here’s What You Need To Know.

By KCM • April 29, 2026

Thinking About an Adjustable-Rate Mortgage? Here’s What You Need To Know. If you’ve been looking for a home lately, you’ve probably felt how tough affordability still is. And that's exactly why more buyers are opting for adjustable-rate mortgages , or ARMs. Here's what you need to understand about how they work, and whether they make sense for you. What Is an Adjustable-Rate Mortgage? Since a lot of people aren’t familiar with this type of loan, let’s start with a definition. This is how Business Insider explains the main difference between a fixed-rate mortgage and an adjustable-rate mortgage: “With a fixed-rate mortgage, your interest rate remains the same for the entire time you have the loan. This keeps your monthly payment the same for years . . . adjustable-rate mortgages work differently. You’ll start off with the same rate for a few years, but after that, your rate can change periodically. This means that if average rates have gone up, your mortgage payment will increase. If they’ve gone down, your payment will decrease.” Basically, one doesn’t change much over the life of your loan. And one could change... either by a little, or a lot. Of course, things like taxes or homeowner’s insurance can still have an impact on a fixed-rate loan, but the baseline of your mortgage payment is fairly steady. But the big difference is that with an ARM, your monthly payment could change over time. Why Adjustable-Rate Mortgages Are Getting More Attention So, why do some buyers choose this option? It's simple. It’s because of the upfront savings. Business Insider explains it like this: “Because ARM rates are typically lower than fixed mortgage rates, they can help buyers find affordability when rates are high. With a lower ARM rate, you can get a smaller monthly payment or afford more house than you could with a fixed-rate loan. ” And right now, according to Mortgage News Daily and the Wall Street Journal , the upfront rate on an ARM is lower than a 30-year fixed mortgage (see graph below): If you’re wondering how that shakes out in real dollars and cents, here’s what Redfin says. According to their research, the typical buyer could save about $150 per month by taking out an ARM instead of a 30-year fixed mortgage. For some people, that’s enough to make a difference. More Buyers Are Choosing Adjustable-Rate Mortgages Today A growing number of buyers are willing to trade the uncertainty later for a lower payment now. Data from the Mortgage Bankers Association (MBA) shows the share of buyers choosing ARMs has increased, especially over the last few years (see graph below). This doesn’t mean ARMs are becoming the go-to option for everyone. It only means some buyers are opting for this type of mortgage, so they can still buy today. And if you remember the housing crash, seeing ARMs gain popularity again may raise concerns. But rest easy. Today’s ARMs aren’t the same. Back then, some buyers were given loans they couldn’t afford once rates adjusted. Today, lending standards are stricter, and lenders evaluate whether borrowers could still handle the payment if rates rise. So, the return of ARMs doesn’t signal another widespread crash. It just reflects how some buyers are adapting to today’s affordability challenges. The Trade-Off – What You Need To Consider If you’re considering an adjustable-rate mortgage yourself, just remember it really all depends on your situation and your risk tolerance. An ARM may make sense if you plan to move before your rate would adjust or if you expect you’ll make a higher income in the future. But there are trade-offs you need to think through. For example, once the fixed period ends, your rate can adjust, and your payment could increase, potentially by a meaningful amount depending on where rates are at that time. And keep in mind, there’s also no guarantee mortgage rates will come down in the future, which means refinancing later isn’t always an option. That’s why it’s important to think through your plan, understand your long-term earning potential, and work closely with a trusted lender before you choose an ARM. Bottom Line ARMs are getting more attention again because they can make buying a home more affordable in the short term. But they’re not right for everyone. The key is understanding how they work, what the risks are, and whether they fit your plan. And that’s why you need to talk to a trusted lender and financial advisor before you make any decisions.

Don’t Let Home Prices Headlines Fool You

By KCM • April 27, 2026

Don’t Let Home Prices Headlines Fool You Spend about 5 minutes online searching for news about the housing market, and odds are you’ll see something pop up about home prices . You may even stumble onto social media influencers saying we’re headed for a crash. Let’s get you the context you need. The truth is prices are going to vary depending on where you live. But they're not crashing. Here’s what you need to know. The Local Perspective: Home Price Trends by Area The biggest thing feeding into the confusion online is how different home price trends are by area right now. Take a look at this data from ResiClub and Zillow (see graph below). About half of the largest metros are seeing prices go up. The other half are seeing some declines. Unfortunately, the online chatter only focuses on the markets where prices are down – and that makes it sound like something bigger is happening. But, as you can see in this graph, that’s only one side of the story. The full picture is different. The National Perspective: Moderate Price Growth As a country, when you average it all together to get a true baseline, one thing becomes clear, home prices are still net positive at the national level. According to the Redfin, national home prices were up about 1% year-over-year in February. So, what we’re seeing right now isn’t a collapse. It’s a market that’s normalizing after a period of unusually fast growth. And that impacts some local markets more than others – particularly those where prices rose too far, too fast during the pandemic. A true crash, like what happened in 2008, would mean prices dropping sharply across the entire country. That’s just not what the data shows today. And it’s not where things are going either. Experts Agree This Isn’t 2008 In fact, Fannie Mae surveyed over 100 housing market experts to ask their opinions on where prices are headed from here. And the experts agree, nationally, prices are expected to keep rising over the next five years : That rise will be moderate, particularly this year, but the trend is clear. Nationally, prices are forecast to grow every year now through at least 2030 – and that’s normal. Daryl Fairweather, Chief Economist, at Redfin explains: “ House prices aren’t going to fall on a national scale any time soon—and that’s actually a good thing. It’s normal for house prices to rise gradually over time . . .” That's why even in the select areas where prices have dropped slightly this year, the decline is expected to be temporary. According to that same quarterly Fannie Mae survey mentioned above, 85% of the experts say the markets that are seeing mild declines right now will return to positive price growth before the end of 2027. The main takeaway? This isn’t a crash. And prices aren’t expected to fall nationally. If anything, the few areas experiencing declines are expected to rebound in the next year or so. Bottom Line It’s easy to get caught up in headlines that make it sound like something big is about to happen. But don’t be fooled. The housing market isn’t crashing. It’s just shifting. The key is understanding what’s actually happening in your market, so you can make the right move for you. Let’s connect if you want the local perspective.