Hard And Soft Credit Inquiries
When searching your credit score and credit history, there are two types of searches. These are hard credit inquiries and soft search inquiries. A hard search will come up on your credit report and may impact your credit score. On the other hand, soft credit inquiries will not leave anything on your credit report.
Soft credit searches are when you check your own score when a potential employer or non-lender does a background check, or if you are just searching for the best rates and offers but not officially applying for any loans or credit cards. Generally, soft searches are not visible to lenders or creditors in conjunction with an application for credit, and you don’t have to worry about how much you are making.
Hard credit searches, on the other hand, occur when a financial institution, official lender or creditor like credit card companies or banks check your credit to determine whether you are a good credit candidate. They can act as a timeline of when you applied for new credit and can stay on your credit report for around 2 years, although will likely have little impact on your credit score past 1 year.
The odd hard credit search over a long period will not likely affect your credit score. However, be wary of having too many hard credit inquiries over a short time. On one hand, recent hard inquiries tell a lender that you are currently looking for new credit. But many recent hard searches may indicate that you have been repeatedly unsuccessful and appear desperate.
There is an exception to this rule. This rule covers if you are seeking a mortgage, auto loans or looking for new utility providers. In these scenarios, multiple inquiries between 2 weeks – 1 month are usually counted as one. They may or may not all show up on your report, but only one will count towards your credit score.
At Lendwise, we conduct an initial soft credit search when we receive a loan application. This is to help us determine whether to make a provisional loan offer or not. A hard credit search is only conducted after a student accepts the loan offer and proceeds to a formal loan agreement.
Has our credit score series made you curious to know more about your credit score?
You can access a detailed copy of your own credit report through CheckMyFile.*
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