Credit scores and credit reports can be a difficult thing to deal with.?One topic that we have not covered nearly enough on this blog are some of the more technical terms, with one of them being about inquiries.
There are both hard inquiries and soft inquires (sometimes they are called hard pulls and soft pulls, respectively), which can open up a whole new confusing world when it comes to understanding your credit.
Below we will go over what exactly an inquiry is and how it affects you and your credit report.
A soft pull on your credit report is when someone pulls your credit report in order to pre-approve you for a loan, such as for a house or a car. Soft pulls are great because they do not actually affect your credit score.
Many people think that soft inquiries affect their credit score, but they do not. You might not even know that your credit report has been pulled until after it’s happened with a soft pull, but they do not affect your credit score so you are fine.
Other ways that you might have a soft pull on your credit report include:
- A potential employer has pulled your credit report.
- Someone wants to send you a promotional offer in the mail for something that you are pre-approved for.
What is a hard?inquiry or a “hard pull?”
A hard pull is when your credit report is pulled and it actually affects your credit score. It might lead to a decrease in your credit score, but usually it is not by much. Usually the affect goes away within a year, so it should never really affect you too much. However, you also do not want a ton of hard pulls on your credit report because it can often look like you are applying for every single loan out there and that you might have a credit problem.
Usually when you are approved for a credit card, a home loan, and so on, you will have a hard pull on your credit report take place.
This is the difference usually between a soft pull and a hard pull – whether it’s just for pre-approval or you are actually approved and being given a loan.
Are there any topics related to credit and/or finances that you would like me to cover in the future?