This is a common concern out there about having your credit report pulled and whether or not this will hurt your credit score. There are certain inquiries that affect your overall score, and in this article we will discuss what really affects your score. There are two types of inquiries on your credit report, and they are called a soft inquiry and a hard inquiry. Here are the breakdowns.
Hard inquiries – this could affect your FICO score.
• Credit report pulls by a mortgage company or a bank
• Application for a credit card
• Application for a car
• Application for a bank loan
Soft inquiries – This does not affect your FICO score
• Pulling your own credit report
• Having a creditor whom you already have credit with pull your credit report
• Credit checks by prospective employers
How interest rate shopping affects your score.
When looking for auto or mortgage loan, this can trigger multiple credit inquiries. To compensate for this the score models allow multiple inquiries within a 30 day period before it scores you. The score model looks for inquiries within that 30 day period and only counts it as one inquiry.
How much could your scores drop as a result of hard inquiries?
In some cases a hard inquiry will not affect your score at all, and in some cases a hard inquiry could lower your score around 5 points. If your credit is in good standing as far as you know, you really don’t have anything to worry about. If you are getting ready to make a purchase or have been turned down for credit, go ahead and see where your credit score stands. FICO recommends that your check your credit often just in case there is something on there that could hinder a credit approval.
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