Hard Inquiry vs. Soft Inquiry

By Avery Mills | Mar 27, 2017 8:58:57 AM

Hard Inquiry vs. Soft InquiryA credit inquiry is when a third party views your credit report. This check is done to make sure your credit and background are in good standing. There are two types of inquiries: a hard inquiry and a soft inquiry.

WHAT IS A SOFT INQUIRY?

A soft inquiry is when a person or company takes a look at your credit. This is usually a routine procedure and could possibly coincide with a background check for a job or a lender you already work with reaffirming your credit score. Checking your own credit score also falls under this category.

WHAT DOES IT AFFECT?

These usually don’t affect your credit score. They may not even be recorded on your report at all.

 WHAT IS A HARD INQUIRY?

A hard inquiry is made when it is being decided whether or not you will be approved for a loan. This includes mortgages, credit cards, and personal loans. These inquiries must be authorized by you. There is also a chance your credit will be checked when you are trying to rent an apartment, rent a car, or open a savings/checking account.

WHAT DOES IT AFFECT?

On average, a hard inquiry has the potential to take about 5 points off your credit score. If you make several hard inquiries in a short amount of time, it may portray to lenders that you are desperate for more credit. These inquiries will fall off your credit report over time.

If there appears to be an inquiry on your credit report that you did not authorize, you will need to dispute it. There are two ways to go about doing this. First, if there has been a check on your credit and you don’t know why, contact the creditor directly. If a check didn’t take place and it was just a mistake, the creditor should be able to assist you. If a check did take place without your authorization, you will need to contact the credit bureau. In the situation of someone trying to open a credit card in your name or other fraudulent activity, you should have a fraud alert placed on your file and contact your local police.

Topics: advice, Blog, credit, credit score, credit report, checking credit report

Author: Avery Mills