Why Credit score down ? Hard inquiries vs Soft inquiries......

23°
Deal Hunter
xedo123

Hard credit inquiries, also known as "hard pulls" or "hard credit checks," are when a financial institution checks your credit during a lending decision, such as when applying for a mortgage, loan, or credit card. They can impact your credit scores by lowering them by a few points or having a negligible effect on your scores. In most cases, a single hard inquiry is unlikely to play a significant role in whether you're approved for a new card or loan. The damage to your credit scores usually decreases or disappears even before the inquiry drops off your credit reports for good.

However, it's important to think twice before applying for a handful of credit cards at the same time or within a few months. Multiple hard inquiries in a short period could lead lenders and credit card issuers to consider you a higher-risk customer, suggesting you may be short on cash or ready to rack up a lot of debt. So, consider spreading out your credit card applications.

The effect of a hard inquiry on your credit scores ultimately depends on your overall credit health. To prepare for a hard credit pull, monitor your credit reports and make sure there are no unpleasant surprises.

Soft inquiries, also known as "soft pulls" or "soft credit checks," are background checks conducted by individuals or companies without your consent. They may be conducted by credit card issuers or employers before hiring. Unlike hard inquiries, soft inquiries don't affect your credit scores and are only visible when you view your credit reports, as they aren't connected to a specific credit application.

So if you wonder Why your Credit Score is down after checking it in some websites because they ask for consent from us for promotional offers on credit cards and loans which leads to hard enquiry sometimes  , so better avoid multiple credit score check in short span of time whether its soft enquiry and especially hard enquiry and also check credit score from good website with a little background check if possible . Read more article to get better idea and any comment and suggestion appreciated 

Disclaimer
We are not SEBI/IRDA registered. The information provided herein is for education purposes only. We will not be responsible for any of your profit/loss with this channel's suggestions. Consult your financial advisor before making any decisions.
1 Comment  |  
2 Dimers
  • Sort By
Deal Cadet Deal Cadet
Link Copied

Credit inquiries play a role in shaping your credit score, but their impact is relatively small compared to other factors. Let’s delve into the details:

  1. Hard Credit Inquiries:

    • Definition: Hard credit inquiries occur when you apply for new credit, such as a mortgage, personal loan, or credit card. These inquiries are visible to anyone who checks your credit report.
    • Impact: For most people, a new hard inquiry will typically lower your credit score by one to five points. However, this impact is relatively minor.
    • Caution: Multiple hard inquiries within a short period can signal that you’re taking on more credit than you can handle. Lenders may view this as a risk factor.
  2. Soft Credit Inquiries:

    • Definition: Soft credit inquiries don’t affect your credit score. They happen when you check your own credit report or receive free credit score updates.
    • Visibility: Unlike hard inquiries, soft inquiries are only visible to you and not to others who may check your report.
    • Instances: Companies may perform soft inquiries for preapproval offers on new credit cards or financial products.
  3. Credit Score Composition:

    • Credit inquiries contribute only 10% to your credit score, while payment history (timely payments) makes up 35% of your score.
    • Overall Impact: A single hard inquiry is unlikely to significantly affect your approval chances for new credit.

Remember to monitor your credit reports, especially before a hard credit pull, to avoid any surprises. And when checking your credit score, choose reputable websites to minimize unnecessary inquiries.

replyuser
Click here to reply
Reply