The average American has multiple credit obligations that include a combination of installment loans and credit cards. Enticing marketing ads, growing credit limits, and life changes all influence consumer spending. Couple this with the number of financial institutions that offer credit monitoring on a monthly basis and the average consumer can find their head spinning when it comes to understanding credit scores and what impacts them. How can credit be responsibly monitored without being significantly impacted?

Types of Credit Inquiries

Credit inquiries are one of a number of factors that are used in determining your credit score, accounting for 10% of the overall score calculation. The bottom line is this, hard inquiries will impact your credit score and soft inquiries will not.

Hard Inquiries

Anytime a consumer is actively working with a lender and gives that lender permission to check credit history, a hard inquiry is logged. Hard credit inquiries impact credit scores by as few as five points with multiple hard inquiries over a short period of time having a larger impact. Common hard inquiry examples may include:

• Mortgage and/or Auto Loans
• Personal or Student Loans
• Credit Card Applications

Soft Inquiries

Soft credit inquiries fall into an entirely different bucket when it comes to what counts against consumer credit scores. If we think of a hard inquiry as being an external request, in contrast, a soft inquiry is an internal request The internal requester is most often the consumer themselves, having every right to inquire without penalty. A soft inquiry has zero, nada, absolutely no impact, on consumer credit scores. Some examples of soft inquiries may include:

• Checking Your Own Credit Report
• Credit Checks by Employers
• Pre-approval Credit Offers

At the Credit Care Company, we specialize in credit scoring counseling by supporting clients with actionable strategies to repair and improve their credit scenarios. We look forward to having you contact us today to discuss your unique credit repair needs.