If you want a loan from a financial institution, lenders have to check the details of your financial credit history. This helps them to determine whether you are eligible for the loan that you are seeking. In addition to this, they will also check how many inquiries you have made. These inquiries that you make usually stay on the credit report for about five years. This means that if you made too many inquires within a short span of time, this could impact your financial credit score negatively. It also means that you may not be able to get the loan that you are asking for.
However, there are soft inquiries that usually do not affect your credit score. This depends on the person who is checking this credit and also the reason as to why they are checking it. For such an inquiry, it will be referred to as a soft inquiry or maybe a hard inquiry. Checking your credit score can be considered a soft inquiry, and hence it won’t affect your score. You will also note that some other soft inquiries also don’t affect the credit score.
A soft inquiry usually happens on the following instances such as when you check your credit score or when a landlord or employer runs a credit check but with your permission. Also, when a creditor runs your credit check so as to pre-qualify or pre-approve your loan, this is also considered as a soft inquiry, and it will not affect your score. The reason these inquiries do not affect your credit score is because you are not yet applying for a loan. Nevertheless, you have to be cautious of hard inquiries that will negatively affect your credit score as well as other things that affect it too.
Some of the things that will lower your credit score as your payment history. If you have a bad history of settling your debts, this will really affect your score. Additionally, the amount of money owed will also spoil your credit score. You must also ensure that you have a longer credit history because this is good for your scores. Credit mix which means having many types of credit such as personal loans, student, credit cards, auto loans, is also good for your credit score. Also new credit can lower your score by at least five points and this occurs every time you get to apply for a loan and your creditor runs an inquiry on the credit report. For more knowledge, people can visit this page https://en.wikipedia.org/wiki/Credit_score.