A credit inquiry, also known as a credit check, is a request by a lender or other authorized entity to access your credit report to evaluate your creditworthiness. There are two types of credit inquiries: hard inquiries and soft inquiries. The main difference between the two is how they impact your credit score.
Hard inquiries: A hard inquiry occurs when a lender or creditor requests to see your credit report as part of an application for credit, such as a mortgage or auto loan. Hard inquiries may also occur when you apply for a credit card. Hard inquiries are recorded on your credit report and can remain there for up to two years. They can also have a negative impact on your credit score, as they suggest that you're actively seeking new credit and may be a higher credit risk.
Soft inquiries: A soft inquiry occurs when someone requests to see your credit report for a non-credit related purpose, such as when you check your own credit report or when a potential employer performs a background check. Soft inquiries are not recorded on your credit report and do not impact your credit score. In fact, checking your own credit report is a good habit to develop, as it can help you spot errors and ensure that your credit information is up-to-date.
It's important to note that not all inquiries are created equal, and some credit scoring models may treat different types of inquiries differently. For example, FICO scores group together multiple inquiries made within a short period of time for a specific purpose, such as shopping for a mortgage or auto loan, to minimize the impact on your credit score.
.credit .debt .loans