Soft and Hard Inquiries: How They Affect Your Credit Score?
When you apply for a loan or credit card, the lender will typically pull your credit report to see your credit history. This is called a hard inquiry. Hard inquiries can temporarily lower your credit score by a few points.
Soft inquiries, on the other hand, do not affect your credit score. Soft inquiries are made when someone checks your credit report without your permission, such as when you’re preapproved for a credit card or when you check your own credit report.
Here are some of the key differences between soft and hard inquiries:
- Soft inquiries do not affect your credit score. Hard inquiries can temporarily lower your credit score by a few points.
- Soft inquiries are typically made without your knowledge or permission. Hard inquiries are made when you apply for a loan or credit card.
- Soft inquiries can be made for a variety of reasons, such as preapprovals or to review your credit report for accuracy. Hard inquiries are typically only made when you’re applying for a loan or credit card.
- Soft inquiries typically do not stay on your credit report for very long. Hard inquiries can stay on your credit report for up to two years.
If you’re concerned about the impact of hard inquiries on your credit score, there are a few things you can do:
- Avoid applying for too many loans or credit cards in a short period of time. This can lead to multiple hard inquiries, which can lower your credit score.
- Get pre-approved for loans before you apply. This will allow you to see what interest rate you qualify for without having to make a hard inquiry.
- Check your credit report regularly for errors. If you find any errors, dispute them immediately.
By understanding the difference between soft and hard inquiries, you can protect your credit score and make informed decisions about your finances.
Here are some additional tips for managing your credit inquiries:
- Keep track of the hard inquiries on your credit report. You can get a free copy of your credit report from each of the three major credit bureaus once per year at AnnualCreditReport.com.
- If you have a lot of hard inquiries on your credit report, wait a few months before applying for new credit. This will give the hard inquiries time to fall off your report.
- Consider getting a secured credit card if you have bad credit. A secured credit card is backed by a deposit, which can help you build your credit history without having to worry about making late payments.