22 Aug Credit Inquiries – Who Is Checking My Credit and How Does It Affect My Score?
Hard or soft, that’s really what matters when it comes to credit inquiries.
When you look up your own credit history or score, that’s a soft inquiry. It doesn’t damage your score at all.
If you use a credit monitoring service, chances are that when they check your credit history for you, that’s a soft inquiry, too. (Double-check with them just to be sure.)
If you get those annoying pre-approved credit offers in the mail, those are based on soft inquiries, and they don’t affect your credit score.
When you interview for a job that requires a credit check, that’s also a soft inquiry.
Basically, any credit check that isn’t made to open a new line of credit isn’t going to harm your history or your score. Most personal credit reports that you request for yourself will show you who has done a soft inquiry into your history over the past two years. You might be surprised to see who has been peeking at your credit history!
If you apply for a new credit card or get a cell phone contract, that’s a hard inquiry. It’s any credit check done because you intend to raise your financial burden.
Hard inquiries knock down your credit score a little bit each time, probably about 5 points if you have good credit. Inquiries will cause more damage if you have bad credit. That’s because the credit bureaus see you as raising your risk of nonpayment by adding on more debt.
If you’re shopping around for the best rate on an auto loan or mortgage, and you group those inquiries together, say within 2 weeks or at the most, 30 days, that’s handled a little differently. If the credit bureau can see you’re checking rates for a single loan, they lump it together so that each inquiry doesn’t knock off points.
The best plan is to find that loan within 30 days. That way your FICO credit score doesn’t drop before you sign on it. (Older FICO score versions give you only 14 days before they calculate in the hard inquiries. Check with the lender to see if they use something prior to Score 8. If so, you’ll need to step up the pace.)
Hard inquiries stay on your credit history for two years. FICO scores stop taking a hit from hard inquiries after a year, but VantageScore factors them in for the full two years.
These checks could be either hard or soft
There are a few times you might get your credit checked and it could fall into either hard or soft inquiries. If your credit isn’t in the best shape, see if you can find out before the check is done how it will affect you.
These times are the following:
- Opening a new bank account even without a credit card offer
- Having your identity verified by a stock brokerage or bank
- Opening a new account for cable or other utility
- Renting a car
Get ahead of the game
As part of our program we will have you sign-up for a credit monitoring service so that you are always aware of the activity on your report (including who is inquiring about your credit history). Call Honore’ Credit Consultants today so we can discuss options for helping to improve your credit profile! (844) 967-3724