Credit Inquiries

This will be a quick overview of all things credit inquiries, so get that cup of coffee at the ready. Credit bureaus collect information on credit and debt to generate credit reports on individuals.  Credit inquiries are important in determining your credit score.

They can help you determine whether you are late on making payments or have been evading debt.  Your credit report is a document with information about the amount of credit you have had, when the inquiries were made, and how long ago they were made.

Credit inquiries can have huge impacts on your credit score and how much you pay for loans in the future. Let’s face it, by “pay” I mean how much interest you will be charged on a loan.

Yes, and as a reminder as to why all this education on how to improve your credit? It comes down to getting the best interest rate. Usually as a side benefit to a better interest rate you can bet the lending institution will offer other incentives to do business with them.

OK, back to credit inquiries.

There are four different types of inquiries, which will be discussed below: hard inquiry, soft inquiry, hard pull, and soft pull. The most common types of inquiries on your credit report are also referred to as hard inquiries and soft inquiries.

Hard Inquiries

Hard inquiries are requests that go directly to the bureaus and pull credit data on you.  They are not removed automatically as they require more work by the lender or business requesting data from the bureaus.  Therefore, hard inquires could stay on your file longer than soft inquires do.

Hard inquiries can be damaging to your credit score as they can show up as negative information on your report and turn up in future credit searches.

 

Soft Inquiries

Soft inquiries are requests to look at your credit report to get basic information such as your balance, when the last payment was made, and how much time it will take for you to repay everything.

When you’ve paid off your debts, a soft inquiry could be removed from your file immediately. A soft inquiry is a small credit search made without the intent of getting a loan. It can be used for identity verification purposes, such as when you’re applying for a new job, applying for welfare benefits, or requesting to rent an apartment.

A Hard pull

A hard pull means that someone has requested a copy of your credit report from the credit bureaus. It is a major event on your credit report. “A hard pull” is a term used when requesting credit information from the credit bureaus.

Generally, a hard pull means that someone has requested a copy of your credit report to check for errors. This can happen when you apply for credit or if you are hired for a job requiring background checks.

A Soft pull

A soft pull is a type of inquiry that does not affect your credit score.  These types of inquiries are typically seen on a credit card application.  It’s important to remember that even though these inquiries don’t show up on your credit report, they are still visible to lenders and can still impact your ability to obtain loans or other financial products.

Now there, don’t you feel like a better human being after learning about the extremely boring details of credit inquiries.

If you want more information, please reach out.