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Difference Between Hard and Soft Credit Inquiries Does Checking Your Credit Hurt Your Credit Score?

Credit scores can be confusing, one day they are up, the next week they have gone down. You may not even know why. You can be on time with all of your payments, you might even pay extra on each payment, but still, your credit score goes down, leaving you baffled about how and why this happened.

Why does your score go down, when you think you’re doing everything right? It could very well be the inquiries showing up your credit report and causing your score to drop down. What is the difference between a hard credit inquiry and a soft credit inquiry? You first have to understand the difference between a soft credit inquiry and a hard credit inquiry. A hard pull impacts your credit score and can cause it to go down, a soft pull does not have an impact on your score.

Which Inquiries are Soft Pull

  • Background checks
  • When your lender pre-approves you for a mortgage
  • When a company prequalifies you for a credit card
  • When you fill out an application to prequalify for credit
  • When you check your own credit score

When do Hard Pulls occur

  • When you apply for credit
  • In some cases, they occur when you ask for a credit limit increase. Before asking for an increase, it’s a good idea to ask whether or not it’s a hard pull.

How to Keep Inquiries from Having a Negative Impact on Your Score

Don’t apply for multiple credit cards or loans within a short period of time. While inquiries don’t drop your score substantially, multiple inquiries do. One inquiry will likely only drop your score by five or so points, however, if you apply for ten credit cards and each drops your score five points you’ve dropped your score by 50 points. These take two years to fall off your report, so they will be with you for quite a while. Before you apply for a credit card, be sure it’s one that you really want. Shop around, don’t just jump to fill out every credit application you see.

Do I have to Give Permission for Hard and Soft Inquiries

You give permission for hard pulls. You may have to read the small print on an application to see it. Just assume that if you’re applying for credit, it’s going to impact your score. You don’t have to give permission for a soft pull. In fact, these happen often and most never even know that they occur. Now that you know a little bit more about soft and hard inquiries, you’ll be better able to avoid letting your score take a serious hit. Your credit is very important and protecting it is something that should always be a priority.In addition to not applying for multiple lines of credit in a short period of time, there are other ways that you can help keep your score up. Take the time to check your credit report from time to time. You’re entitled to a free credit report each year. Take advantage of this, and check for errors. Surprisingly, many people find errors on their credit report. Dispute errors with the agency, and have them removed.

Take the Time to Check Your Credit Report from Time to Time

You’re entitled to a free credit report each year. Take advantage of this, and check for errors. Surprisingly, many people find errors on their credit report. Dispute errors with the agency, and have them removed. Also, dispute any hard pull inquiries that have not fallen off your report after two years.Getting these off can raise your score, and having them gone may also give lenders a more favorable view of you. Finally, remember to seriously consider whether or not you truly want each credit card that you apply for, if you’re not sure about one, pass on it for now. If you’re not sure, it’s not worth taking a hit on your score.