What’s the difference and why should you care?

Picture this: you’re minding your own business, living your best life, when suddenly, a lender wants to get all up in your credit business with a hard credit inquiry, also known as a “hard pull.” But what does it mean? And why does it matter? Buckle up, because we’re about to break it down for you in a way that won’t put you to sleep.

The truth about hard inquiries

So here’s the deal. 

When a lender does a hard inquiry, they’re basically snooping around in your credit report, trying to figure out if you’re a responsible borrower or a financial hot mess. 

They look at things like:

• your payment history 
• how much credit you’re juggling 
• how long you’ve been racking up debts 
• the types of credit aka your credit mix

All of this intel helps them decide whether to give you more credit or shut you down faster than a “closed” sign on a Monday morning.

But wait, it gets better. 

You can actually prepare for a hard credit pull with a soft credit inquiry, or as we like to call it, a “soft pull.” Think of it like a gentle pat on the back, instead of a full-on slap in the face. 

Checking your own credit reports counts as a soft pull, so you can keep tabs on any surprises that might pop up. You don’t want any unexpected guests crashing your credit party, do you?

How do hard inquiries affect your credit score?

Now, let’s talk about the juicy stuff: hard inquiries and your credit score. 

Do they get along like peanut butter and jelly, or are they mortal enemies? 

Well, the truth is, hard inquiries can ding your credit score, but it’s all temporary. They only stick around on your credit report for two years, and their impact usually fades away after one year. Sure, they might drop your score a few points, but it’s nothing you can’t bounce back from with a little responsible financial behavior.

A word of caution about hard inquiries

Here’s the deal though: 

Too many hard inquiries in a short amount of time can raise some eyebrows and make lenders think you’re desperate for credit. 

And trust us, nobody likes a desperate borrower. So, try to keep those hard pulls to a minimum, unless you want the whole world to think you’re throwing yourself at every loan and credit card out there.

But hey, don’t stress too much. A couple of hard inquiries won’t send your credit score into a downward spiral. 

It’s all about maintaining a healthy credit profile, which includes paying your bills on time and not racking up too much debt. 

In fact, the number of hard inquiries is just a small part of what determines your credit score. So as long as you’re being responsible, a few hard inquiries won’t completely wreck your dreams of that sweet credit card or loan.

What’s the deal with hard credit inquiries? 

Let’s break it down for you in a way that’s easy to understand. 

We’re talking about those credit checks that have a big impact on your credit reports. But don’t worry, we’ll also cover soft credit inquiries, just to give you the full picture.

So, let’s start with the hard credit inquiries. These are the ones that can make a dent in your credit history.

I’m talking about things like:

• mortgage applications
• auto loan applications 
• credit card applications 
• student loan applications 
• personal loan applications 
• apartment rental applications 

Yep, they all fall into the hard inquiry category.

But here’s the thing, there are other types of credit checks that might give your credit a little shake. For example, those utility, cable, internet, and cell phone providers also like to take a peek at your credit. Sneaky, right?

Want to know how to kick some hard credit inquiry butt? 

Well, first things first, keep an eye on your credit reports like a hawk. If you spot any mistakes on any of your credit reports, like a sneaky hard inquiry that you didn’t authorize, it’s time to take action!

To start, consider disputing that sucker with the credit bureau. They’re the ones who can help you out in this situation. And if you need even more firepower, reach out to the Consumer Financial Protection Bureau (CFPB) for some extra backup.

Now, here’s the juicy scoop.

According to Experian, one of the big shots in the credit bureau world, an unauthorized hard inquiry could be a sign of identity theft. Yikes!

So, you definitely want to get to the bottom of this.

Just keep in mind, you can only challenge hard inquiries that happened without your permission. If you gave the go-ahead for a hard inquiry, it usually takes a couple of years for it to vanish from your credit reports.

So go on, be the credit superhero you were meant to be, and dispute those unwanted hard inquiries!

Hard inquiry pro tip

Oh, and before we go onto more deets about soft inquiries, here’s a credit pro tip: 

Keep a close eye on your credit and only apply for the credit you really need. 

If you’re planning on getting a mortgage or a big loan in the near future, it’s best to hold off on any new credit applications. Trust me, your credit score will thank you.

What are soft credit inquiries, huh? 

Let’s break it down for you in a fun and informative way.

Soft inquiries, also known as “soft pulls” or “soft credit checks”. 

These little guys happen when someone, like a potential employer or a credit card issuer, checks your credit as part of a background check. Sneaky, right? 

But don’t worry, soft inquiries don’t mess with your credit scores. They might or might not show up on your credit reports, depending on the credit bureau. And guess what? They’re like a secret just for you to see when you check your credit reports.

But wait, there’s more! 

Let’s dive into some examples of soft credit inquiries. You know, just to give you a taste.

• First, we have to check your credit score. Yep, that’s a soft inquiry right there. 
• Next up, we’ve got those exciting “pre-qualified” credit card offers. They’re soft inquiries too! 
• Oh, and don’t forget about those “prequalified” insurance quotes – soft inquiries all the way. 
• And last but not least, we have employment verification, aka background checks. You guessed it, soft inquiries.

The bottom line

So, the bottom line is, soft inquiries are no biggie. They won’t mess with your credit scores, and they’re like little secrets hidden in your credit reports. 

But when it comes to hard inquiries, well, they’re like the nosy neighbor keeping an eye on your credit moves.

So there you have it. Hard vs. soft credit inquiries, demystified. It’s important to be aware of these because they can have a serious impact on your credit. 

Now you can go out into the credit world armed with knowledge and a touch of swagger. You’re welcome. 

Stay financially savvy, my friend!