Whenever a business checks your credit report, your report contains a questionnaire indicating the month and year your credit report was verified. Credit bureaus do not track query inquiries as a service to you or businesses that may see your credit report in the future. In fact, the Fair Credit Reporting Act requires credit bureaus to keep records of businesses that check your credit report.
When you check your credit report, you will see a list of these questions towards the end of your credit report.
While all the questions come up together in the list, there are two types of credit report questions: heavy inquiries and soft inquiries.
You may be surprised to see questions from businesses with which you have never applied for a loan. Some may even be businesses you have never heard of. Don’t overdo it; these are most likely soft investigations and not as serious as you might think.
A soft query, sometimes called a “soft move,” is made on your credit report every time you check a credit report, the business checks your credit report for promotional purposes, or the business you already have in the account that checks your credit report . For example, a credit card company may ask for a credit report to decide whether to send you a pre-approved credit card offer. With the exception of your own requirements for your credit report, soft inquiries are handled without your permission. Fortunately, this soft research does not affect your credit score, no matter how many appear.
Hard information, on the other hand, is put on your credit report whenever a business checks your credit report to approve your application for a credit card, loan, or other credit-based service. Hard research accounts for 10% of your credit score. While it will remain on your credit report for two years, difficult questions only affect your credit score for a year.
Occasionally, a business will check your credit report for reasons other than granting you credit. For example, car rental companies sometimes check their credit if you do not use a major credit card. If you have questions about whether the query will be difficult or soft, you can ask the company that pulls your credit report. You want to minimize difficult questions if you are trying to maintain a good credit score, and especially if you are planning to apply for a big loan soon.
You already know that soft queries are not included in your credit score. This means that you do not have to worry about these issues that cost you valuable credit. When potential lenders check their credit report, they will not see soft inquiries. Instead, they will only see the hard questions that are accomplished when you run the credit or credit application. The good news is that all these priceless insights into your credit score won’t count against you when it’s time to apply for a loan.
However, if you pull out a copy of your credit report and provide it for business review, soft inquiries will appear as your version of your credit report.