What is Soft Credit Check?
This term credit inquiry describes what happens when someone requests and receives your credit information. The first step of the process involves some party sending a request for information, or an “inquiry”, to one of the three credit bureaus. Next, the credit bureau can share your credit report if the person or company. Making the request has a legal right to ask for it. The exception here is if you have placed a credit freeze on your data.
The federal law offers you the right to know who has accessed your credit information. A credit reporting agency must record each credit inquiry in your credit file. Most credit inquiries remain on your credit. Report for two years as a matter of policy. Hard vs. Soft credit check.
There are two types of credit checks, hard inquiry, and a soft inquiry.
Hard Credit Check
A hard inquiry happens when you apply for something. When a hard inquiry shows up on your credit report, it could lower your credit score.
The following are the types of credit checks and examples of hard inquires:
- Firstly, loan applications (mortgage, auto, student, personal, etc.)
- Secondly, credit card applications
- Thirdly, requests for credit limit increases
- Also, applications for lines of credit
- Then, new utility applications
- Apartment rental applications
- Lastly, the collection agency skips tracing.
Soft Credit Check
Soft inquiries do not impact your credit score. When a lender checks your credit report, soft credit inquiries do not show up at all. Soft inquires are only visible on consumer disclosures credit. Reports that you request personally.
The following types of credit checks are examples of soft inquires:
- Personal credit checks
- Pre-approved credit offers
- Insurance applications
- Account reviews by current creditors
- Employment applications.
Benefits of Soft Credit Check
With soft inquires, consumers can better. Understand how their credit score is reported with the various credit agencies. One of the best ways of doing this is by taking advantage of free credit scores offered. Via your credit card company. Nearly every credit card company offers cardholders a. Free credit score assessment, and each assessment will vary by the reporting agency. These inquires are considered soft pulls and can offer you information. Your credit score and credit profile each month.
The Fair Credit Reporting Act (FCRA) is in charge of regulating how credit bureaus or. Agencies collect and share an individual’s financial information. According to the law, consumers have the right to obtain free. Copy of their credit report every 12 months from the credit bureaus. Individuals can also get a copy of their report from the government. An authorized website is known as AnnualCreditReport.com.
Soft inquiries are listed on a credit report and can proffer useful. Information as to what companies are considering extending credit. These inquires will be found under a subheading like “inquiries or inquiries that. Do not affect your credit rating”. This portion of your credit report will show the details of all soft inquires. Including information like the name of the requester as well as the inquiry date.