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Hard vs Soft Inquiry’s Recap
In yesterdays post, we quickly talked about a soft inquiry, I was asked if I could do a quick recap of what is the difference between a hard inquiry and a soft inquiry on your credit reports. Here you go!
For those of you out there who just skim an article looking for the quickest answer, here you go! Just remember this. Hard bad, soft good. For the rest of us who want a little more info lets dig into the exciting world of credit inquiry’s! (ok I know it’s not that exciting).
We will start with the evil ones, the hard inquiry. A hard inquiry is when a potential lender pulls your credit report. This can be anything from a credit card company, a mortgage company, pay day loan, buying a car, insurance quote, to applying for an apartment. A hard inquiry will hurt your credit score. Just having one will not harm you score very much, and your score will quickly rebound from it. Where you score can take a beating is if you are constantly applying for credit. Have numerous hard inquiry’s spread over a period of time will decrease your score, sometimes significantly. The rational behind this is that if someone is looking at your credit, you must be shopping around for credit. And if your looking for credit, there is a good chance you will get credit, and this will throw off the balances that you have in place, and your scores will have to be readjusted according to your new balances. And if constantly getting hard inquiry’s it shows the credit scoring companies that you could be building up a lot of debt, and could be potentially carrying large balances that will again change your credit to debit ratio.
There is some good news credit scoring takes into account that you will want to shop for the best rate possible when considering a large purchase such as a car, mortgage, or large ticket item. You will still be dinged for a hard inquiry, but you are allowed to shop around for a short period of time, usually around two weeks. In this period you can get more hard inquiry’s and they will not have same effect on your score if you had been spreading those out over weeks or months.
You still with me? Ok so this usually comes the most common question, does checking my credit report, or enrolling in a credit monitoring hurt my credit score? This is where soft inquiry come in. When you pull your credit or sign up with a credit monitoring service you get what is called a soft inquiry. And these will not hurt you credit score. You are allowed to pull your credit as often as you like and have no penalty for doing so. You are the only who will ever see your soft inquiry lenders do not have access to this data. This is one of the benefits of a credit monitoring service is the ability to check your credit score as often as you would like. That way you know where your score is before shopping for credit, knowing your score will give you a good idea if you will be approved for credit or not. With that information you will then know if its worth the risk of a hard inquiry on your credit score.
How many times per year does your credit get pulled?
I have been in the credit monitoring business for over 10 years now! And there have been many questions that I did not know the answer too, but most of them with a little research I could find out and then give my interpenetration of it. I feel with credit related questions there are the black and white answers, for example “will enrolling in a credit monitoring service hurt my credit score?”. The answer is 100% no, it will not have any effect on your credit score, its a soft inquiry and they will not harm you.
To more of grey area answers where nobody truly knows the answers. An example would be “Holding 30% debt on your credit cards is the fastest way to build credit”. Well 30% is not a magic number, you do not have to pull out your calculator and figure 30% down to the penny. And to be honest I have even advised that 30% is a good number to build up your credit quickly, but there is as much evidence to show that 10% or 20% will build it just as fast. You see, what the credit bureaus are looking for is to show you can make month payments on time, every month for a period of time.
I would say that in my years of doing this, that its about a 50/50 split on where the answers may fall. Like most things in life we are using our best experiences and data available to use to make our answers. With that said here is a seemingly very simple question for which I have no answer to.
I question came in asking what is the average amount of times per year is your credit checked? Well I tossed that question into Google and thought I would be overwhelmed with answers. It turns out I found none! Not even at Wikipedia which usually has a very diverse set of answers. You just have to be sure to take them all with a grain of salt as its human edited, and as such any “experts” can state whatever they want.
So I thought well I guess I can try to gather some data on my own to take a best guess answer at it. Asking people in the office how many times they thought their credit was pulled brought up a huge range of answers. It seems as an average many people get a hard inquiry more times a year than they thought.
An good example of this is a younger person who has only been in the work force for a few years. Over the last year they moved into a new apartment, and with that came around 5 checks to their credit. They then bought a new car, shopping for the best deal they went to 3 different dealerships, and that is 3 new inquiry. After they bought the new car, they need insurance, shopping around again for the best rate racked up 3 more inquiry’s. This seem to be about the average here in our office. We did have many outliers though, some people had no inquiry’s at all over the last year, and others had many more!
So what does this all mean? Well not much, except for the fact that this just shows how many times per year we willing give out our financial information to a 3rd party, and that if you add that up over the years it becomes a pretty scary number of places that our personal data is stored, and could be compromised by a security breach, and shows how having a credit monitoring service in place can really help your protect your credit!
What to do if your wallet gets lost or stolen!
Most of have been there, that feeling of dread knowing that your wallet is gone! Its a terrible feeling! Here are some tips to help you back back on track and to minimize the potential impact this can have on your credit.
First think you will want to do is to start monitoring your credit with our credit monitoring services, you will want to watch for fraudulent activity for at least 90 days. Our credit monitoring will monitor all 3 of your credit reports for you, and it will send you an alert via, text, email, mail, or phone call if we detect any changes on your reports.
Next call your credit and debit card issuers and report that your card was stolen or lost. If you happen to be reading this post before a lost or stolen wallet take the time to right down your account numbers and customer service numbers and put them in a safe place for easy access! Lost and stolen cards are quite common, and your credit card and debit card company will have a team to assist you in closing down your cards, and reissuing new cards.
If you are sure that your wallet was stolen and not lost call the police department. While the police will not be able to help you track down your stolen wallet it is important to have on record a police report in case the thief tries to steal your identity. This will give you a legal record showing that you knew your wallet was stolen, and that you took the steps you needed to take to report the loss.
Try to think if there was anything else in the wallet that had your personal information on it. This could be a note that you wrote to yourself with a password on it, or anything else that could be used against you. If there is any chance that your passwords are compromised change them as soon as you can. Its better to be safe than sorry!
This is possibly the most painful step of all of them! Head tot he DMV to have your drivers licensed cancelled and a new one issued.
Having your wallet stolen is never a fun experience, but with these tips you can minimize any damage that could be done to your credit!
Protect Yourself On Cyber Monday!
Cyber Monday is in full swing, and if your like me I would rather shop online than fight the crazy crowds at the store. Did you see that at one place a lady peeper sprayed fellow shoppers in order to get an XBOX! Yikes! Online shopping does come with its own risks, but I am fairly certain getting peeper sprayed is not one of them! Here are a few tips to protect yourself while you do your do your cyber Monday shopping.
Shop on sites you trust! Stick with sites you know and love. I am not saying that just because the site is well know that they are safe from cyber attacks, but you are much better off with a well known retailer. At the same time make sure you are really on the site you think you are. A common trick is to build a site that looks exactly as it should look, but have a slight misspelling in the domain name. Always check to make sure you are on the actual site and not a clone.
Make sure if you are completing a purchase that you are on a secure site. You can check this very easy by looking in the nav bar and looking for https:// vs http:// The S on the end means that you are connected to a secure site.
If you are shopping a new site that you have not been to before and creating a new account use a strong password. It is also important to use a different password for all the sites that you belong to. That way if one site gets hacked, they will not have your password for all other sites you belong to. Again I want to stress make it a strong password, capital letters, and numbers!
Stay off public WiFi if you are going to be making purchases, or logging into any accounts that may having your financial data. This could be banks, or credit unions, or shopping sites.
And as always keep an eye on your credit reports. If you are a member of our site, we will be doing this for you with your credit monitoring subscription so you will not have to worry!
Credit Monitoring Black Friday Deals!
If you are in the market to enroll in a credit monitoring service, you in luck. Its Black Friday today and while everyone is out on the town searching for the best deals on holiday gifts, we have a great offer for you! Enroll in our credit monitoring and we will give you a free 2 week trial. Have complete access to your credit reports, and credit scores, and try out all the features of our award winning credit monitoring. Ok, so you caught us, we always offer a 2 week free trial, but I figured while I am at work today while everyone is out shopping, that I would like to be able to offer a Black Friday deal.
Yesterday while eating Thanksgiving dinner, I was asked what is the quickest and easiest way to increase a credit score. It took me off guard because I am not used to people asking me that question outside of a professional setting. And since it was family and friends I felt I could speak much less formally and get right to the point. The easiest and quickest way to raise your credit score is to enroll in the credit monitoring service and look over you credit reports. Find any information that in inaccurate and then dispute this information. Having information that is wrong on your credit reports will hurt your credit score, and will be a negative against you.
If you get this information removed, which should be as easy as a letter to the credit bureau that is reporting the wrong information and it will be removed. At that point it will come off your credit reports and your credit score will increase to where it should be. That is my recommendation for the quickest and easiest way to increase your credit score.
I hope everyone had a great Thanksgiving! I wish to personally thank everyone who has signed up for our credit monitoring, and who reads this blog. Our customers are the best there is, and I love being able to help them all get the best credit monitoring products on the market.
