A common misconception that comes with the thought of hard inquiries is that anytime you have your credit pulled, you will receive a small ding you your credit. While there are several ways to pull your credit report, a hard inquiry only occurs when you inquire for a loan or financing with a lender. This means that as long as you are pulling your credit for information purposes (such as preapproval ratings or personal credit checks) you will not see an inquiry appear on your report.
While soft inquiries are still inquiries and will show up on your credit report, a soft inquiry holds no weight on your score. Soft inquiries are only available to the consumer who requested them and can not be seen by lenders. If you are worried about soft inquiries mucking up your credit report when your trying to read your information, they will fall off of your report in about a year.
Hard inquiries are a strange item as they affect your credit shorter than they are on your account for. With hard inquiries, they will hold weight over your credit for about at year, but are listed on your report for two years. This is because hard inquiries are meant to serve as a timeline to show how often you attempt to apply for new lines of credit and how easily you are accepted by lenders. In many cases, hard inquiries also will not show up as multiple inquiries on your report if they are made withing a certain amount of time when shopping for a home or vehicle loan.
One common misconception when it comes to hard inquiries are the weight that they hold when they are listed on your credit report. It isn’t a case of “each hard inquiry is worth 5 points and if I have 10 on my report then my score will drop by 50 points”. Hard inquiries do not necessarily have a dedicated weight value and their potency depends upon what current positive credit is listed on your report. Someone with a thoughtful credit utilization rate and a beautiful credit history will not feel the effects of a couple hard inquiries as much as someone who has yet to fully establish their credit portfolio.
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