Does Getting a Quote Affect Your Credit?

When seeking financial services like insurance or loans, consumers often obtain quotes to compare options. A common concern is whether simply getting a quote will negatively impact their credit score. Understanding the distinction between different types of credit checks is important.

Credit Inquiries Explained

Credit inquiries record who has accessed your credit report. There are two types: soft inquiries and hard inquiries. A soft inquiry, also known as a soft pull, occurs when a company checks your credit for informational purposes. This happens when a lender pre-screens you for an offer, or when you check your own credit score or report. Soft inquiries are visible on your credit report but do not affect your credit score.

In contrast, a hard inquiry, or hard pull, occurs when you formally apply for new credit, such as a loan or a credit card. This signals to lenders that you are actively seeking new credit, which can be viewed as a higher risk. Hard inquiries can cause a small, temporary dip in your credit score, typically by a few points. They remain on your credit report for up to two years, though their impact usually diminishes within a few months.

Quotes Without Credit Impact

Many quotes involve a soft inquiry, meaning your credit score remains unaffected. When shopping for insurance (auto, home, or life), companies often perform a soft credit pull to determine premium rates. This allows them to assess risk without negatively impacting your credit standing. Even multiple insurance quotes from different providers will not lower your credit score.

Similarly, when you seek pre-qualification or pre-approval for loans like mortgages, auto loans, or personal loans, lenders typically use a soft inquiry. This preliminary check provides an estimate of potential rates and terms based on your credit profile, without committing to a full application or affecting your score. Checking your own credit score or report is always a soft inquiry and has no effect.

Quotes With Potential Credit Impact

Certain types of quotes or applications can lead to a hard inquiry, which may affect your credit score. When you submit a formal application for a new credit card, the issuer performs a hard inquiry to assess your creditworthiness. This can result in a slight, temporary reduction in your score.

Applying for a mortgage, auto loan, or personal loan beyond the pre-qualification stage also typically involves a hard inquiry once you submit a full application. While one hard inquiry might cause a minimal score drop, multiple applications for different types of credit in a short period can accumulate and potentially lower your score more noticeably.

However, for specific loans like mortgages or auto loans, credit scoring models often account for “rate shopping.” They treat multiple inquiries within a certain timeframe, usually between 14 to 45 days, as a single inquiry. This allows consumers to compare rates from various lenders without undue penalty. Some utility providers may also perform a hard inquiry when you open a new service account, depending on their policies and your credit history.