Hard inquiries may be known as “hard pulls” or “hard credit checks”. This happens when a financial institution, such as a lender or credit card company runs your credit to approve you. The most common take place when you apply for a mortgage, auto loan, or credit card, and will always require your authorization.
A hard inquiry will lower your scores by an average of 2 to 5 points and have a negligible effect on your scores. In most cases, a single hard inquiry may determine a huge role in whether you’re approved for a new car or money loan. hard credit checks generally stay on your credit reports for about two years.
This could be worse if you are applying for a handful of auto loans at the same time or even within the span of a few months apart. Multiple hard inquiries in a short period could lead lenders and credit card issuers to consider you a higher-risk customer.
Examples of Hard Inquiries:
- Mortgage applications
- Auto loan applications
- Credit card applications
- Student loan applications
- Personal loan applications
- Apartment rental applications
Soft inquiries are also referred to as “soft pulls” or “soft credit checks”. This typically occurs when a person or company checks your credit as part of a background check. This may occur, for example, when a credit card issuer investigates a Pre-Approval or Prequalify your credit without your permission to see if you qualify for certain credit card offers. Many employers run a soft inquiry before hiring you.
Soft inquiries won’t affect your credit scores. They may or may not be recorded in your credit reports, depending on the credit bureau. Soft inquiries are not connected to a specific application or new credit and are only visible to you when you view your credit reports.
Examples of soft Inquiries
- Checking your credit score on any type of credit monitoring system
- “Prequalified” credit card offers.
- “Prequalified” insurance quotes.
- Employment verification (i.e., background check)
When you’re buying a home or car, don’t let the fear of racking up multiple hard inquiries stop you from shopping for the lowest interest rates.
We recommend checking your credit reports often with some type of credit monitoring. If you have a hard inquiry that occurred without your permission, please be ALERT!! This could be a sign of identity theft. Keep in mind we can only dispute hard inquiries that occur without your permission. If you’ve authorized a hard inquiry, it generally takes two years to fall off your credit reports.
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*Individual results may vary. Please call for more details and to discuss your own individual situation.