If you’ve ever applied for insurance, an apartment rental, gotten a cell phone on contract, or been hired by a company and given them your social security number, there is a decent chance they examined your credit report. This includes applying for loans or a mortgage. All of the above circumstances are known as hard credit inquiries.
Normally, a hard inquiry is expected from time to time. However, problems can arise when multiple hard inquiries appear over a span of months. This can damage your credit, at which point it might be a good idea to work with licensed credit repair companies in Texas to remedy the situation.
Soft Versus Hard Inquiries
Not all credit checks are the same. They come in two varieties: soft and hard.
Soft Inquiries
A soft inquiry occurs when a company offers you a promotional 0% auto loan or a pre-approved credit card, then goes to the credit bureaus to ask for some basic info about you. Typically, this means your name and your credit score. They probably won’t have detailed info and won’t calculate your credit utilization. If your score is high enough, they’ll pre-approve you and send you a letter offering you a great rate on a credit card.
Similarly, a company that you already have an account with may want to offer you additional goods and services. Because they know situations may have changed since you opened an account and they looked at your credit, they will take a second look.
Soft inquiries are not listed on your credit report, as you weren’t actively seeking a loan. They do not in any way affect your credit score, and no one can see them. In fact, even individuals have to specifically request information from the credit bureaus to know if soft inquiries were performed on their own credit score.
Hard Inquiries
We explained at the beginning of the article that having many hard inquiries can damage your credit report. All hard inquiries are listed on your credit report for anyone to see, and they are visible for up to two years.
This can be damaging, because when someone sees multiple hard inquiries, they might worry that you are desperate for a loan. Those desperate for loans may not have the money to pay it back, and furthermore, may have been denied multiple times.
What if you didn’t go shopping around for a loan, yet you have multiple hard inquiries? It could be that an insurance, auto, or mortgage broker ran your credit report with multiple banks, or it could have been identity fraud.
Having a credit report full of hard inquiries for a short period of time is okay, because when you’re shopping for a loan it’s expected that you’ll make multiple inquiries. As long as these are within a fifteen to forty-five day window, all is good.
Fighting Fraud
If you believe the inquiries are fraudulent, it’s time to work with a reputable credit repair company like The Phenix Group. We can help get false information, such as medical bills affecting your credit in Texas, removed so you can get your credit back on track and take control of your financial future!