Do You Know The Difference Between A Hard Inquiry And A Soft One
Below is a MRR and PLR article in category Finance -> subcategory Credit.
Understanding the Difference Between Hard and Soft Inquiries
Summary
Are you in the market for a credit card with a great rate? Shopping around can lead you to several options, each with its own benefits and drawbacks. While one card may have attractive rates, it might also come with an annual fee. Another could have no annual fee but high late charges. While exploring options is wise, applying for multiple cards could impact your credit score more than you realize.
Key Concepts
- Hard Inquiry: Impacts credit score
- Soft Inquiry: Does not affect credit score
- Credit Score: A critical factor in loan applications
Hard Inquiries Explained
Each time you apply for a credit card, loan, or store credit, a record of this activity appears on your credit report. Known as a "hard inquiry," these can negatively affect your credit score. Many people are unaware of this impact, which can lead to unintended damage to their credit. Unfortunately, this isn't often disclosed upfront, leaving many to face unexpected consequences.
Understanding Soft Inquiries
Contrary to a hard inquiry, checking your own credit report results in a "soft inquiry," which doesn't affect your score. If you ever find a soft inquiry negatively impacting your credit report, it's essential to rectify the mistake promptly.
Mortgage Inquiries
Credit reporting agencies make an exception for home loans. With numerous mortgage options available, multiple inquiries within a 14-day span are treated as a single inquiry. Aim to complete your mortgage rate shopping within 30 days to minimize any potential impact on your score.
Conclusion
Creditors assess the number of inquiries on your report. If you have four or more within a six to nine-month timeframe, it may be deemed excessive, potentially leading to credit denial. This denial will also appear on your credit report, further affecting your score. Therefore, carefully consider the necessity and impact of each application on your credit rating before proceeding.
By understanding the difference between hard and soft inquiries, and planning your applications wisely, you can better protect and improve your credit score.
You can find the original non-AI version of this article here: Do You Know The Difference Between A Hard Inquiry And A Soft One .
You can browse and read all the articles for free. If you want to use them and get PLR and MRR rights, you need to buy the pack. Learn more about this pack of over 100 000 MRR and PLR articles.