Your credit score helps determine where you live and what type of car you drive, so it’s wise to remain informed about the various things that can hurt it. For instance, the difference between a soft inquiry vs. a hard inquiry has the potential to knock your credit score down a peg, which can increase your APR or even prevent you from getting a loan altogether.
How does this work? Read this PDS blog to discover what a hard inquiry and a soft inquiry actually are, along with how they can harm your credit profile.
What’s a Hard Inquiry?
When a creditor does a credit check to determine your worthiness for a loan, they must also perform a hard inquiry on your credit score. Whether you’re applying for a new credit card, a car loan or a mortgage, you can usually expect your credit score to dip a little bit.
Although this typically won’t affect your score that much, it can become a bigger issue if you try to get credit from multiple institutions. Therefore, it’s important to not overextend your credit requests.
Does a Hard Inquiry Affect My Credit Score?
As previously mentioned, a hard inquiry will affect your credit score. You’re probably wondering how much it will hurt you, or maybe you’ve asked: how many points does a hard inquiry affect credit score by? The good news is that most hard inquiries will only cause your credit score to drop by approximately five points.
Another thing that can help is if you’re shopping around for a new auto loan or mortgage, the majority of creditors will be lumped together, which means you’ll only take one hit. However, this doesn’t apply to things such as applying for a credit card, so be mindful of how often you ask a creditor to check your credit history.
What’s a Soft Inquiry?
Naturally, you’re probably now wondering two important things:
- How many points does a soft inquiry affect credit score?
- Whats the difference between a hard inquiry and a soft inquiry?
Well, we’ve got positive news for you; a soft inquiry is conducted only for informational purposes, so it doesn’t affect your credit score at all!
In other words, there’s no reason to ask: does soft inquiry affect credit score? Whenever a lender sends you a pre-approved offer, runs an apartment application or background check, it does not change your credit score.
Does a Soft Inquiry Affect My Credit Score?
As mentioned above, a soft inquiry doesn’t have any effect on your credit score. This is a good thing, especially considering that soft inquiries do not require your permission.
Since having soft inquiries doesn’t hurt your credit, there is no need to seek their removal, either. Instead, you can simply ignore soft inquiries.
Soft Inquiry vs. Hard Inquiry
Soft inquiries aren’t an issue, but hard inquiries may end up hurting your credit score. As a result, you might ask: how long does a hard inquiry stay on your credit report? Believe it or not, a simple credit check can end up impacting you for up to two years. It’s important to note, though, that your actual credit score will only be affected for one year.
Hard inquiries are another matter, though, so it’s wise to find out about hard inquiry removal. Unfortunately, there is currently no way to have a hard inquiry removed, so be cautious when seeking credit.
No Credit Check Loans
One way to avoid all the hassles involved with hard inquiries is to take out a no credit check secured loan. You might have to put your car title up as collateral, but it can give you the ideal way to avoid having hard inquiries to your credit report. Needing more help? Contact PDS to get your free debt assessment today
