How Hard & Soft Credit Inquiries Can Affect Your Score
Posted by About Mortgage on February 22nd, 2019
Many homeowners who feel the pain of dealing with high mortgage payments look for an alternative route out. This is where refinancing a mortgage has become a viable option for homeowners. However, this decision of taking a home loan or refinancing a mortgage must not be taken in haste. It is very important to take into consideration every crucial aspect to reach a well-informed decision. One such important consideration is creditworthiness through your credit score. Before giving permission to a third party to run an inquiry on your credit history, it is important that you understand its consequences.
Also known as credit pull, a credit inquiry is essentially a request by a borrower to check your credit.
Soft Credit Checks
Soft credit checks don’t affect your credit score, so you need not worry when applying for a loan or an inquiry, even if they occur without your permission. Soft inquiry can be considered as “background checks” when a mortgage lender pre-approves you for a loan or an employer for a job. Although soft inquiries do not affect your credit score, they may have an impact on certain decisions made by the business or other systems that you have sent an application.
Hard Credit Checks
Hard inquiries, on the other hand, may lower your credit score by a few points; however, it may have temporary effects. If you shop around for a better home loan refinance rates and lenders make multiple hard inquiries, it could negatively impact your credit score. The good thing about these inquiries is that they don’t occur without your permission. When a business or lender carries out this inquiry without taking clear consent from you, checking the credit report details aids in the decision for dispute.
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More information and a link to a credit report is available at https://aboutmymortgage.com/refinancing-and-credit/
Author's Bio - The author is an online blogger. This article is about credit inquiries.