Too Many Credit Inquiries? Learn What Credit Repair Can Do For You
(RightWing.org) – If you’ve looked into credit repair, then you know that certain credit inquiries can damage your credit score short term, while others are longer lasting. When you’re in the credit repair process, is it possible to repair the damage done by these inquiries? The answer is a bit complicated as it depends on your situation. While it’s not always possible to remove credit checks from your credit score, there are some things you can do to lessen the impact they have on your score. It’s all about understanding the different types of credit checks and how to mitigate them.
What Are Hard and Soft Credit Inquiries?
There are two different types of credit inquiries or “checks” that can appear on your credit report: hard and soft.
Hard checks happen when you apply for a credit card or loan. You will have to provide explicit permission for a hard check to occur — it’s in the language you agree to when you fill out a credit card application. Because of this, you should know when a hard check is going to impact your credit.
Soft checks don’t require your permission and they don’t affect your score. Have you ever received a pre-approved credit card offer? This happens because the credit card company hoping to issue you a card has already done a soft credit check. Soft inquiries often happen due to employment background checks, pre-approvals, or because you have allowed someone to check your credit in this way for some other reason.
This may lead you to believe that hard inquiries on your credit report are bad, but that’s not the case — they are simply impactful. If they result in a loan that gets you what you need and improves your credit score, it’s a handy thing to have. It’s just important to be mindful of them.
How Can You Reduce Hard Inquiries On Your Credit Report?
The red flag for prospective lenders is a high number of hard credit checks in a short amount of time. This makes it look like you’re trying to get credit because you’re in bad financial shape. Knowing that, here’s what you can do to minimize the impact of hard credit checks.
- Always check your credit report. We recommend once per quarter. You’ll want to make sure you keep track of your hard inquiries and dispute those that are not legitimate, along with any other activity you did not authorize.
- Seriously consider before applying for that line of credit. Don’t be lured in by the guarantee of a loyalty discount in exchange for a credit card application — it can still hurt your score.
- Are you applying for a loan or mortgage? Try grouping them together by making all applications within 45 days — FICO considers this one check. If you’ve ever applied for an auto loan, you’ll notice that your dealership may have checked with multiple lenders, each running their own credit check. However, it should come back as one inquiry, since it all happened at the same time. Grouping is a clear indication that you are exhibiting normal consumer behavior — shopping for the best rate you can get.
This rule does NOT apply to credit cards, however. Those still get counted separately.
While hard inquiries don’t have a significant amount of impact on you, they can look like red flags to lenders in the future. By practicing other positive credit habits, continuing to pay things on time, and performing other behaviors that can raise your score, you can minimize the impact of these hard checks and inquiries.
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