The difference between a hard inquiry and a soft inquiry primarily lies in their impact on your credit score and when they occur. A hard inquiry happens when a lender checks your credit report with your permission as part of a credit application process, such as applying for a credit card, loan, or mortgage. This type of inquiry can temporarily lower your credit score and remains on your credit report for up to two years, though its impact usually fades after one year. A soft inquiry occurs when your credit information is checked without a specific application for new credit, such as when you check your own credit, a company pre-approves you for an offer, or an employer conducts a background check. Soft inquiries do not affect your credit score but also stay on your report for up to two years. In summary:

Aspect| Hard Inquiry| Soft Inquiry
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Purpose| Credit application by borrower| Credit check not tied to application
Impact on Credit Score| Can lower score temporarily| No impact on credit score
Permission| Requires your permission| May not require permission
Duration on Report| Up to 2 years| Up to 2 years
Examples| Applying for credit card, loan, mortgage| Checking own credit, pre- approval, employment check

This distinction helps consumers understand when their credit score might be affected and why some checks do not influence their creditworthiness.