Skip to main content

 

Hard vs. Soft Credit Inquiries
decorative image
When you get a copy of your credit report, you'll see more than just your current and historical credit accounts. You'll see your payment history, including any payments made more than 30, 60 and 90 days past the due date, along with your account balances and credit limits. You'll also see credit inquiries.


A credit inquiry is simply an instance where you or a third party has looked at your credit report. Some credit inquiries can have an impact on your overall credit scores, but not all inquiries are so consequential. There are two types of credit inquiries – a hard and a soft inquiry.

Soft inquiries are common and somewhat frequent. The most common type of soft inquiry is one where a creditor is curious about offering you a new credit account, so they check your score to make sure you qualify. If you've ever received an offer for a credit card that's preapproved, that company has done a soft inquiry on your report.

Other types of soft inquiries include potential employers checking your credit, or when you check on your own score. It's important to understand that soft inquiries have no impact on your credit, but they will be noted on your report and can be done without your consent.

Hard inquiries occur when you apply for a loan, credit card, or mortgage and you've given written consent to a creditor to check your scores. Several hard inquiries in a row for a credit card can negatively impact your score, as this type of action may give the impression you're scrambling for credit ahead of some financial hardship. Multiple hard inquiries in a row from an auto, mortgage, or student loan lender are less likely to have a negative impact. In these instances, reporting agencies are more likely to assume you're “rate shopping,” and the multiple inquiries are viewed as a single inquiry.

Hard inquiries stop impacting your score after a year's time, but they will remain on your credit report for 24 months. While inquiries do play a part in assessing an individual's credit, they represent only about 10% of what goes into a credit score. Things like making payments on time and your overall debt burden have a far greater impact on the health of your credit reputation.

Comments

Post a Comment

Popular posts from this blog

Which States Have the Lowest Cost of Living?

  Which States Have the Lowest Cost of Living? For many of us, the past year has brought about a slew of unexpected changes. The pandemic didn’t slow rising home prices or increase the amount of available inventory in major metro areas, but what it did do was dispel the idea that all office workers must be tethered to a physical location. With remote work becoming more and more normalized, many Americans are wondering why they’re paying exorbitant housing costs for less space, less privacy, and less stability. With that in mind, let’s take a glance at the most affordable places to live in the United States by cost of living index*. Mississippi:  With a cost of living index of 84.8 (the national average is considered 100), Mississippi has the lowest housing costs in the country and has held the top spot for years. You can expect to pay around $134,000 for a home, so if you’re looking for a new home town where your money can go further, Mississippi might be for you. Oklahoma: ...
Post a Comment
Read more

For Builders and Buyers, Lumber is a Bummer

  For Builders and Buyers, Lumber is a Bummer Over the past several years we’ve seen  real   estate  prices climb higher and higher due to a limited supply and an increased demand, but a new factor is pushing prices up even further: the skyrocketing price of building materials. So, what’s behind these increased prices, and, more importantly, when can we expect some relief? We’re all painfully aware that the pandemic triggered widespread supply chain issues, and building materials have been no exception. Supplies of steel, aggregates, and cement have dried up, but the trend might be most noticeable when it comes to lumber. Nearly every aspect of home construction necessitates lumber – framing, trim, doors, flooring, windows, railings, and cabinets. The pandemic shut down lumber mills across the country, and supply chains were slowed by a shortage of truck drivers. Low interest rates and a lack of existing inventory increased demand for new construction, and all that n...
Post a Comment
Read more

Tips for Gardens Great and Small

  Tips for Gardens Great and Small Like the fabled “Victory Gardens” of WWII before them, urban and backyard vegetable gardens became a vital source of food and purpose for many people last year when world events threw supply chains into disarray. A year has passed, but interest in do-it-yourself food production has remained, and more and more DIYer's are getting into growing their own crops. Your ability to grow fruits, vegetables and a variety of herbs at home depends primarily on just three things: climate zone, space available and your level of commitment. With plenty of warm days ahead, it's not too late to get started on a garden of your own. If you're limited to an indoor garden, consider hearty options like avocados, carrots, microgreens, lemons and scallions. You'll need some large, south-facing windows to have a successful garden. If that's not an option, grow lights and hydroponic kits have become a popular option in recent years as they've become mor...
Post a Comment
Read more