Difference between Hard and soft inquires

[Augusta]

There are always two types of inquiries that can be made on one's credit report which are the hard and soft.

Hard inquiries is when very important establishments like a financial institutionsa bank, credit card company or even mortgage lender gain access to the credit report of a customer that's applying for credit. Hard inquiries in most cases are made only with the express permission of the customer and it will be reflected in the customers credit score.

Soft inquiries is about when someone accesses the credit report of a customer but not because the person applied for any new credit. Even the owner of the credit report can ask for a copy of their own credit report. This is also about generating a soft inquiry.

People like the Employers or landlords might also want to carry out soft inquiries as part of their background checks. Additionally, The fact is that Soft inquiries can be made without anyone permission and might not reflect in ones credit score.

With the borrowing of a new loan , a borrower will see a small drop in their credit score when they get a new loan, but the credit score will go back up with time and on-time payments.

 

[Knowlopedia]

When you are looking to finance something, whether it be a car, a home or even just a new credit card, lenders will often do a hard inquiry on your credit. This type of inquiry can lower your credit score by a few points and generally stays on your report for two years. A soft inquiry, on the other hand, will not have any impact on your score and only stays on your report for a year.

Hard inquiries are generally initiated by the lender, whereas soft inquiries are usually initiated by the consumer. Hard inquiries are also more likely to result in a loan or credit being extended, whereas soft inquiries are more likely to just provide information.

In general, hard inquiries are more serious than soft inquiries and can have a bigger impact on your credit score. So, if you are looking to finance something, be aware that a hard inquiry may be involved.