| There are many people that tell us that pulling your | | | | since you didn't request it of them, it doesn't damage |
| credit and having credit inquiries will always damage | | | | your credit either. It is only when you solicit a loan that |
| your credit score. Well, I want to shine some light on | | | | requires a credit report to be pulled that you may see |
| the subject, because that is not always true. | | | | your credit score decrease. As a matter of fact, when |
| Before we can debunk the credit inquiry myth, it is | | | | you access your own report, these "soft" inquiries |
| important to know that there are two types of credit | | | | from companies will all be listed out for you, so you |
| inquiries. Although this system for inquiries isn't new, | | | | can see who has accessed your information. |
| many people don't want to talk about it because of | | | | That brings us to the second type of credit inquiry, |
| two reasons: 1. they just don't know better, or 2. they | | | | which are the hard inquiries. I've already touched on |
| want to keep this information from you in order for | | | | these, but let me get a little deeper into them. These |
| their scare tactic to work on you. | | | | are the inquiries that you get from applying for credit |
| So, let's get right into it. | | | | cards, insurance, school loans, mortgages, auto loans, |
| The first type of credit inquiry is a soft credit inquiry, or | | | | installment loans (like furniture), and other types of |
| soft pull, because you are the one requesting your | | | | credit. |
| own credit. When you request your own credit, there | | | | Since this is for commercial use, and you are looking to |
| is absolutely no damage to your credit or credit score | | | | obtain credit with these companies, these are the |
| whatsoever. The reason is simple. How can you | | | | damaging ones. Now, if you have only pulled your |
| properly monitor your credit if you get penalized every | | | | credit once or twice in 6 months, you have no worries. |
| time you access it? (You are monitoring your credit, | | | | However, if you apply for 2 or 3 credit cards a month, |
| aren't you?) | | | | your score can potentially drop even 80 points in a |
| So, you can actually access your credit every month | | | | short period of time. Be careful and smart about |
| to check for errors or new account history or | | | | applying for credit. If possible, spread them out over |
| whatever, and your credit score will not decrease. | | | | time, but only if you really need them (which many |
| There, the secret is out! But before you get too | | | | times you don't). |
| excited about this, I also have to mention to you that | | | | Finally, there are two last points that I want to make in |
| lending institutions, whether you are applying for a | | | | regards to hard inquiries. If you get crazy on the credit |
| mortgage, a car loan, or a credit card, will not use your | | | | applications, there comes a point where the credit |
| credit report for your safety and theirs. It all comes | | | | score will stop going down, because the maximum |
| down to accountability. | | | | damage has already been done. So, let's say that you |
| If I brought in my own credit report to you, and asked | | | | pull your credit a million times in 5 days, that wouldn't do |
| you to lend me $200,000 for a house, and you didn't | | | | more damage than pulling it 100 times in 5 days, |
| check my references, but solely went off of what I | | | | because you've already exhausted all the damage |
| provided you, would you lend me the money? | | | | that can be done with credit inquiries. There are other |
| Chances are, you wouldn't. Well, believe it or not, there | | | | factors that can lower your score, but in that case, |
| are still people out in this world that forge documents | | | | additional credit inquiries will not. |
| to get what they want. | | | | In addition to that fact, mortgage and auto loans |
| On the other hand, when the bank pulls your credit, | | | | operate a little differently as well. For these two, you |
| their name, account number, and contact information | | | | have a 14 day window which you can shop around for |
| appears on your report, so they know for certain that | | | | a mortgage or car loan without any further damage. |
| the information that they have is real. But, more | | | | So, if you are shopping for a mortgage, you have 14 |
| importantly, if they falsify anything just to get your loan | | | | days to look around and multiple companies can |
| through, they get the lawyers after them, not you. | | | | access your credit without any damage to your score. |
| Don't worry though, this doesn't happen too often, but | | | | The same goes with an auto loan. You just can't flip |
| you should know about it anyway. | | | | flop, and apply for a mortgage and within 14 days |
| The other part of soft inquiries is when you get a | | | | apply for a car thinking that you will not get penalized, |
| pre-approved offer from credit cards in the mail. They | | | | because that would be 2 inquiries since car loans and |
| have in fact taken a look at your credit; however, | | | | home loans are different kinds. |