credit facts 101
Inquiries are basically a record of who has pulled your credit report within the past two years. Inquiries made within the past 12 months make up 10% of your credit score.
Hard inquiry: Hard Inquiries over six months have 1/2 of the effect on your score compared to recent inquiries.
Soft Inquiry: Banks and other companies do this to confirm your identity. Credit card companies routinley perform a soft inquiry to check your credit report.
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Credit is a vital part of financial health, and understanding credit inquiries is essential to maintaining a good credit score. Inquiries can be categorized into hard and soft types, each affecting your credit in different ways. Here’s what you need to know: A hard inquiry occurs when a lender checks your credit report as part of their decision-making process, such as during a loan application. It can impact your score by about 5 points or more, and multiple hard inquiries within a short period can accumulate, delivering a more significant impact. Generally, hard inquiries stay on your credit report for up to two years, though their effect diminishes over time. In contrast, soft inquiries do not affect your credit score; they typically occur when you check your own score or when a company checks your credit for pre-approved offers. Understanding the implications of these inquiries can help you make informed decisions about applying for credit and managing your financial future. By carefully monitoring your inquiries and credit habits, you can work towards a stronger credit profile.
