What kind of credit inquiry has no effect on your credit score?
What kind of credit inquiry has no effect on your credit score?
A soft inquiry, also known as a soft pull, is a type of credit check that does not affect your credit score. Soft inquiries occur when someone checks your credit report for reasons other than lending you money, such as:
- When you check your own credit report
- When an employer checks your credit as part of a background check
- When a pre-approved credit card offer is mailed to you
- When a utility company checks your credit before you sign up for service
Soft inquiries are typically used to verify your identity or to assess your overall creditworthiness. They are not considered to be an indication of credit risk, so they do not affect your credit score.
How long does a hard inquiry affect your credit score?
A hard inquiry, also known as a credit pull, occurs when a lender reviews your credit report to make a decision about whether to approve your application for a loan, credit card, or other type of credit. Hard inquiries can have a temporary negative impact on your credit score, typically by less than five points. The impact of a hard inquiry will usually diminish over time and disappear entirely after one year. However, the hard inquiry itself will remain on your credit report for two years.
What is a soft inquiry?
A soft inquiry, also known as a soft pull or soft credit check, is a type of credit check that does not affect your credit score. It occurs when someone checks your credit report for reasons other than lending you money.
Examples of Soft Inquiries
Here are some common examples of when a soft inquiry might occur:
- Checking your own credit report: You can check your own credit report from AnnualCreditReport.com at no cost. This is a soft inquiry that will not affect your credit score.
- Employer background checks: Some employers may check your credit as part of a background check before hiring you. This is also a soft inquiry.
- Pre-approved credit card offers: You may receive pre-approved credit card offers in the mail. These offers are based on soft inquiries of your credit report.
- Utility company credit checks: When you sign up for a new utility service, the company may check your credit to determine whether to require a deposit. This is a soft inquiry.
What types of inquiries do not impact your credit score?
There are two main types of credit inquiries: hard inquiries and soft inquiries. Hard inquiries can impact your credit score, while soft inquiries do not.
Hard inquiries occur when a lender checks your credit report as part of the application process for a loan, credit card, or other type of credit. Hard inquiries can temporarily lower your credit score by a few points, but the impact typically diminishes over time and disappears entirely after one year. Hard inquiries remain on your credit report for two years.
Soft inquiries, also known as soft pulls or soft credit checks, occur when someone checks your credit report for reasons other than lending you money. Soft inquiries do not affect your credit score. Common examples of soft inquiries include:
- Checking your own credit report
- Employer background checks
- Pre-approved credit card offers
- Utility company credit checks
- Landlord credit checks
Do all credit inquiries affect credit scores?
No, not all credit inquiries affect credit scores. Only hard inquiries, also known as hard pulls, can have a temporary impact on your credit score. Hard inquiries occur when a lender checks your credit report as part of the application process for a loan, credit card, or other type of credit.
Soft inquiries, also known as soft pulls or soft credit checks, do not affect your credit score. Soft inquiries occur when someone checks your credit report for reasons other than lending you money. Common examples of soft inquiries include:
- Checking your own credit report
- Employer background checks
- Pre-approved credit card offers
- Utility company credit checks
- Landlord credit checks
Hard inquiries typically remain on your credit report for two years, while soft inquiries typically remain on your credit report for one year.
The impact of a hard inquiry on your credit score will vary depending on your overall credit history. Typically, a single hard inquiry will have a small, temporary impact on your credit score, lowering it by less than five points. However, multiple hard inquiries in a short period of time can have a larger impact on your credit score.
If you are concerned about the impact of hard inquiries on your credit score, you can take steps to minimize their impact. For example, you can shop around for loans or credit cards before you apply, so that you only apply for credit that you need. You can also check your credit report regularly to identify any errors or inaccuracies that could be negatively impacting your score.
