What Is a Hard Credit Score Inquiry?
A hard credit score inquiry is usually done when you are directly applying for some type of credit and the institutions where you are applying checks your credit report to see if you qualify for a loan. Typical instances when a hard inquiry would take place is when you apply for a credit card, a car loan, a student loan or a mortgage. In most cases, you will directly authorize the lending institution to pull your credit report because you are hoping to get the credit or loan.
The important aspect of the hard credit score inquiry is that these do lower your credit score. While a single hard inquiry will only lower your score by a few points, a number of hard inquiries over a short period of time can have a much more profoundly negative affect on your score. Hard inquires usually stay on your credit report for two years, although the negative affect of them may wear off before they completely disappear from the report.
What Is a Soft Credit Score Inquiry?
A soft credit score inquiry is when a credit report is requested, but not for the purpose of giving you credit or a loan. For example, if you want to rent an apartment, the apartment company may do a soft inquiry just to make sure you haven’t defaulted on paying rent or on other loans in the past. They aren’t going to lend you any money, but they want to make sure you have a good record of paying debts. Another example would be when you check your own credit score. You aren’t going to be giving yourself a loan, but you may want to know it so you can try to improve it before requesting a loan. Free credit score companies like Credit Karma, Credit Sesame and Quizzle all use soft inquiries. Soft inquiries can be requested without your permission, and while these may show up in your credit report, they aren’t detrimental to your credit score in any way like the hard inquiries can be.
Why Do Hard Inquiries Hurt Your Credit Score?
A single hard inquiry shouldn’t hurt your credit score too much. It might take a few points off of it, but this usually isn’t any concern in the scheme of things. If, however, you have several hard inquiries in a short period of time, this can send up red flags that you’re having money issues. When the credit bureaus see several hard inquiries in a short period of time, the assumption is you may be in dire need of credit or there’s some reason you aren’t qualifying for credit. Both these are seen as greater risks of you not being able to pay back loans or credit, and thus your score will fall.
Will Using Credit Karma, Credit Sesame or Quizzle Hurt My Credit Score?
Since Credit Karma and other sites like it use soft inquiries to give you your credit score at no cost, they won’t adversely affect your credit score. The credit bureaus know that soft inquiries are for informational purposes, not for trying to get more credit, and thus they are usually ignored by the credit bureaus when it comes to your score, even when there are a number of them made over a short period of time. For this reason, using free credit score companies that use soft inquiries to get your score won’t end up hurting it.