Ever wondered why your credit score fluctuates after seemingly routine activities like test-driving a car or applying for a loan? Let's break it down.
Soft vs. Hard Inquiries:
Soft Inquiries: No impact on your score. Often initiated by you or a creditor for pre-approval or account review.
Hard Inquiries: Can lower your score. Triggered when you apply for credit, indicating potential risk to lenders.
Actions Triggering Hard Inquiries:
Getting a new cell phone: Cell phone companies often check credit before contract approval.
Applying for a mortgage: Lenders assess your ability to make timely payments.
Renting furniture/appliances: Many rental agreements are credit-based.
Protecting Your Score:
Ask before sharing personal info: If unsure, ask if a transaction will affect your credit.
Monitor credit reports: Regular checks help detect unauthorized inquiries.
Remove outdated inquiries: Inquiries stay for 2 years but have less impact over time.
Empower Yourself:
Be proactive in credit management.
Understand the impact of inquiries on your score.
Choose wisely when authorizing credit checks.
Sign up for our email list to receive information and inspiration!
Comentários