What About Hard And Soft Credit Checks?

In case if you have not looked into your credit report for pretty a long time it will certainly be a shock for you when you finally do it in the “credit checks” section.

In your report you will probably see a huge number of report inquiries from financial institutions you have never even heard of.

Did you see such things?

But don’t worry too much! You just need to know a very important things about credit inquiries:

These can be either hard or soft.

Below we will explain you more what each type of credit checks is about.

OK, let’s start!

How People Understand What An Inquire Is

Let’s put it simple so that everyone could get the idea. So practically a report check is just an attempt to get information about person’s credit history and to figure out if this person is financially reliable or not.

Typically credit checks are made by:
· credit card issuers
· companies you had a job interview with or companies interested in your professional skills
· utility companies
· apartment companies
· credit repair companies

The Truth

Each credit inquiry is recorded and stored in your credit report for 2 years.

Actually there is no need to remove these inquiries from the report - just pay attention to these and remember the dates of these requests.

By the way, hard credit checks do not just remain in the report - these can even reduce your credit score by up to 5 points, however typically they take away only 1 or 2 points.

Anyway, even 1 point may be too much. You need to know that each and every point matters.

VantageScore - not a really popular scoring system, though - may reduce up to 20 points from one’s credit score for every credit check request.

Of course, potential creditors see all inquiries as well. Noticing that there have been quite many hard credit check requiries recently a creditor may consider you as a very risky customer.

Creditors consider such people to be too unstable and sometimes even desperate.

They do not want to spend time and to analyze everything - they never know your full story.

Therefore we kindly ask you to be really cautious and avoid initiating too many hard credit check inquiries.

A soft inquiry has no impact on your credit score - these are visible to you only, no one else can see soft inquiries in your credit report.

Hard Checks:

A lot of financial organizations may send hard credit inquiries.

Please be ready that every such a request will certainly have negative influence on your FICO score.

Below are the types of such hard requests:
· mortgage requests
· car loan inquiries
· refinance requests
· business loan applications
· student loan eligibility checks
· and so on

Soft Checks (absolutely harmless):

Just like hard inquiries soft checks may be done by many organizations.

Actually, even you may perform a soft inquiry when doing the annual credit check.

Another way to initiate a soft credit check is to contact a credit company or agency as ask it to check items in your credit report.

Another reason for a soft inquiry is employer’s check.

By the way, there is a huge number of soft inquiries one has no chance to control - those from various marketing companies, credit card issuers and other organizations which simply check if you theoretically meet their expectations.

If you do then there is a big chance that you will get emails from such companies - they will offer loans, mortgages, credit cards and so on. So if you see such an email, rest assured that these guys have certainly made a soft credit check.

Beware of debt collections - they do such checks as well.

But don’t worry, such soft requests have no impact on your credit score - you may just feel a bit uncomfortable when seeing such checks in your report. You can also contact such credit agencies and bureaus and ask them to remove you from their list - they must do it and cannot re-add you within next 5 years.

Only For You

Such soft inquiries may be seen by you only - no one else can access these. When you see such numerous checks in your report you may feel worried about the impact on your credit score, but please remember - soft checks do not reduce the score!

Car insurance companies, debt collectors, banks and many other organizations make such soft inquiries regularly.

You need to get used to such inquiries - these are made not for you only, but for every adult citizen.

Mortgage Companies and Brokers

You need to be especially careful whenever you do one of the three following things:

When applying for a car loan, mortgage loan and consumer (personal) loan.

In all the three examples you will have to deal with either lenders or brokers. Working with a lender directly is better as there will be only one credit check.

But if you contact a broker it means that your credit score will be reviewed by as many lenders as the broker shares your financial information to. The number of inquiries would be really high then.

How to avoid this? Oh, it’s really simple - just ask if you are dealing with a direct lender or a broker when borrowing money for any purpose.

Feel free to ask the same questions when dealing with vehicle sellers and companies issuing loans for car purchase.