There are two kinds of credit inquiries that can happen, soft inquiries and hard inquiries. What is the difference? How do these affect my credit score? Will these pulls show on my credit report? Who can do soft and hard inquiries? Do you have to authorize these inquiries? No need to worry, we will be able to answer all these questions for you.
Soft credit inquiry (also known as a “soft pull”)
Soft credit inquiries most often occur when a person or company does a background check, or you apply for some sort of pre-approval. Did you know that soft inquiries can be done with out your authorization? No need to worry, soft credit inquiries do not affect your credit score. Often times when we receive “pre-approvals” for credit cards, a soft credit inquiry has been done by said company to see if you may qualify for their current offer. Soft credit inquiries will not show on your credit report, and like a stated before they will not affect your credit score. Soft inquiries can be made by lenders, employers, phone companies, and utility providers. Even you when you use credit monitoring sights like Credit Karma. These soft inquiries are not required to be authorized.
Hard credit inquiry (also known as a “hard pull”)
Hard credit inquires often occur when a financial institution, such as a lender or credit card issuer, check your credit when making a lending decision. Often times this will happen when you are applying for mortgages, auto loans, and even credit cards. Commonly you have to authorize hard inquiries. Hard inquiries will show on your credit report. They also can affect your credit score. Multiple hard inquiries in a short period of time can dramatically lower your score. When you agree to have your credit pulled make sure you know how many times they plan to pull your credit! Hard inquiries can be done by lenders, credit card companies, landlords, and employers. Remember these pulls typically need to be authorized.