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What’s with Hard and Soft Credit Inquiries?

By Ruth Racey
Published: Thursday, April 15th, 2010

One of the most important things that you must do is for you to have credit inquiries. Doing this would be inevitable, especially when you want to check if you have the necessary requirements in applying for a loan, or a mortgage, or any other transaction that requires data over your credit card account. Remember that there are certain financial transactions that need a certain requirement from your credit card account, as well as a credit score requirement. In this case, you also need to do a credit inquiry whenever you want to monitor the health of your credit account, especially when you are concerned with proper financial managing. 

However, the sad fact is that, even your credit inquiry itself may even hurt your credit score. Remember that the last thing that you want to have is a low credit score, especially when you are avoiding high interest rates and debt accumulation. In this case, it is important for you to know the difference between hard and soft credit inquiry. This may be the difference of doing a credit inquiry that may hurt your credit score or not. 

  • Soft credit inquiries
    Soft credit inquiries are types of inquiries that are not initiated by the consumer. In this case, it is actually the credit companies who are the one that initiates the credit inquiry. Usually, these types of credit inquiries are in the form of mailing lists that credit card companies initiate to consumers. Therefore, in these types of inquiries, do not expect your credit score to be hurt in any way.  
  • Hard credit inquiries
    These are the type of credit inquiries that is initiated by the consumer. This is the reason why it may affect credit scores, especially when it is done for so many times. Remember that there are a lot of instances wherein you need a credit inquiry, such a supplying for loans or mortgages. In this case, the lender is going to check your credit worthy, to see if you are qualified to get the loan that you need or not. And this process itself makes your credit score go down a bit. 

Given such differences between hard credit inquiries and low credit inquiries, it is important then that you must be able to properly do them, especially when you do not want credit scores to be hurt. The last thing that you want to have is a low score, especially when it is just because of a credit inquiry. In addition, do not forget not to overdo hard credit inquiries.

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