As we discussed in our last tip, having your credit pulled can be quite detrimental to your FICO score. However, what also comes into play are “Hard” Inquiries and “Soft” Inquiries.
Hard inquiries occur only when “you are applying for more debt.” Soft Inquires, on the other hand, are all other inquiries. Can you guess where the largest quantity of soft inquiries comes from? Surprisingly, they come from your current creditors performing routine checkups. You may not know this because it’s in the minute writing you didn’t read when signing your contract with them. Your creditors frequently pull your credit for continued risk assessment; this way, they know if they should offer you a credit limit increase, slap you with a credit limit decrease, or if things look really grim, just end your shopping spree altogether with a closed account. Another popular soft inquiry that will appear is when you check your credit report online. A soft inquiry will not cause a point deduction on your credit report.
A hard inquiry on the other hand is going to occur when you apply for anything from a gas card to a mortgage loan. Additionally, if you apply to have your limit increased on your credit card, that would be “hard” versus your creditor doing it on their own accord.
When qualifying for a mortgage, every point counts, especially the 2-5 point deductions that the average hard inquiry creates. In most situations, these inquiries are right in our wheelhouse, as they are rarely performed according to the letter of the law. For more help call 866-488-2066 and don’t forget to pass along your referral source to qualify for a $100 discount which is over 50% off our initial fees.