Building Credit

What Is A Hard Inquiry?

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. 

   -Soft Inquiries-

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.

How Long Do Hard Inquiries Stay On A Report?

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. 

How Much Do Hard Inquiries Hurt My Score?

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.

Building Credit After Graduation

Building Up Your FICO

When I graduated high school, like many students, I had no idea what a credit score was, how to build my credit or how big of a roll it would play as I progressed in life. Honestly, I thought to myself “If I can’t pay cash for something then and there, I probably don’t need it”. It was not until I rented my first apartment and attempted to finance a vehicle for my new work commute that I realized the importance of credit. 

The first question I asked myself was “What exactly makes up a credit score and what is a FICO?  Your FICO is determined by the categories and ratios listed below on the pie chart. Payment history and debt listed on the report are the two major factors that make up most of your credit score. As long as you keep your credit utilization low and make on time payments, your credit score should slowly start to rise. Your credit history, types of listed accounts and new accounts also hold weight when it comes to your final score, but as long as you keep your payment history and debt in good standings, the other three metrics should follow.

FICO® Score | Credit Score | Florida Credit Union

The Importance Of Credit

When I went to get my first decent vehicle so I could make my hour commute to work, I realized just how important credit was as I was denied repeatedly for financing due to my lack of credit.  Each time my bank or a lender pulled my credit, I felt a knot form in my stomach as I knew what the answer was going to be. If your payment history is bad or you are lacking credit history, the lender will not have substantial information on your borrowing credibility and will not be able to offer a loan. If you happen to have no credit history and don’t have a credit score, it can be almost as bad as having a poor credit score. 

The Typical Way To Build Credit-Credit Cards

When you are attempting to begin your credit building journey, chances are your first thoughts land with a new credit card. When trying to open a credit card with no credit, chances are you will not be able to find a lender due to your lack of credit history. Luckily, your bank is usually open to issuing you a credit card with them. Take in mind that this credit card is not a normal card and is not meant to take you on your next shopping spree. Your bank will offer you a secured credit card for you to make small purchases like filling up your vehicle. For more information on secured credit cards, click HERE. As long as you keep your secured card in check, make on time payments and make sure it doesn’t report with a high balance, you will notice a slow increase in your credit. Now that you have your secured credit card in check, what is another way to build credit while your credit builds? 

Become an authorized user

A wonderful way for parents to help their children build and establish credit is to make their child an authorized user on of their existing credit cards. You will want to review your payment history and length of history on the card prior to adding your kid on the credit card. If you have an older card, with no late payments and a positive credit history, this would be the best one to add your child to. Keep in mind that your child does not have to make purchases with the card for it to affect their credit and that all positive and negative history and payments on the authorized account will impact their score. 

While there are a few other options to build credit as a beginner, these two listed ways are by far the most efficient and the safest way to begin. If you have any questions or comments, feel free to email us at .

Scroll to top