These inquiries – soft or hard – may have some implication on your credit score. When it is a soft inquiry, there is no impact on your credit score. And when it is a hard inquiry, it casts some spell on your credit score.
Soft inquiry: Ideally, it is recommended to check your credit score once in a year. This is important to check for any inaccuracy that needs to be spotted.
Hard inquiry: When you apply for a loan, the lender checks your credit score for the purpose of disbursing a loan. As the name suggests, this inquiry is typically more intense than a soft inquiry. As a result, this leads to loss of credit score, but only marginally.
Key points to note:
I. It is important to check your credit score from time to time. Every year, customers should check it for accuracy and to stay abreast of any change in the credit score.
II. When you check your credit score, it leads to a soft inquiry, and you dont witness any loss of credit score.
III. Soft inquiry takes place when your credit report is viewed for reasons other than applying for new credit. These inquiries are visible only to the user (and not to banks or lenders reviewing your credit file).
IV. Hard inquiry happens when you apply for car loan, credit card or personal loan. And it is visible to other lenders also.
Disclaimer: Mint has a tie-up with fintechs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.
