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Hard Credit Inquiry Vs. Soft Credit Inquiry

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In terms of your credit report, and different companies pulling your credit report, you will often hear the terms hard credit inquiry and soft credit inquiry. They mean different things, and as a result have very different potential effects on your credit score. So, what are the key differences between a soft credit inquiry and a hard credit inquiry?

Soft inquiry / soft credit pull – This is used when the inqury does not affect your credit score. Many times, you will not even know when one of these has happened. For example, when you check your own credit score or credit report, many people are concerned that this will affect your score. However, this is a soft pull, and will not drop it. Another example is all of the “pre-approved” credit card offers that you likely receive in the mail. Those companies have likely done a soft pull of your credit report, but it will not hurt you.

Hard inquiry / hard credit pull – This is used when the inquiry will affect your credit score negatively. These will usually happen anytime you are getting a loan (such as a mortgage, or car loan) or applying for a new credit card. A hard credit pull will be done, and it could drop your score by about five points for six months. Now, if you do this rarely, it shouldn’t really have a big affect. However, if you frequently apply for new cards or get new loans, it could drop your credit score a considerable amount. A good rule of thumb would be that if you are going to be applying for a new loan within the next six months (like a mortgage), you would definitely want to shy away from anything that will generate a hard credit inquiry. Credit Karma advises keeping these to one to two per year.

So that is a basic outline of the difference between a hard credit inquiry and a soft credit inquiry. Do you have any experience with these, and have you ever gotten a hard credit pull that has adversely affected your ability to get a future loan?

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