What is the difference between a soft and hard credit inquiry?

A soft inquiry is a credit check that doesn't affect your score, used for things like prequalification offers or checking your own credit. A hard inquiry happens when you formally apply for credit and the lender pulls your report to make a decision; it may lower your score by a few points and stays on your report for about two years, though its effect fades sooner. Ask any lender which type it will use before you apply.