Hard Vs. Soft Credit Inquiries: What You Need to Know
You know your credit score is not just a number — it’s a way to measure your financial health, to define your credibility for a new line of credit, even demonstrate your reliability as potential new employee or tenant. Your credit score comes into play in all these scenarios and can determine how successful the outcome is.
There are several components that make up your credit score, each impacting it in a different way. About 10% of your credit score is defined by inquiries for new credit, otherwise known as hard inquiries. Hard inquiries into your credit, like those done by creditors, can remain on your report for up to two years. Why does the amount of hard inquiries matter? Lenders are wary of reports with a high amount of hard inquiries which may indicate cash flow problems or plans to take on lots of new debt.
So what’s the impact of a hard inquiry? And how does that compare to a soft inquiry? Let’s find out now.
2O’Shea, B. (2020). How Long Do Hard Inquiries Stay on Your Credit Report?
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