Buy Here Pay Here Advice: Hard Credit Inquiries

Man in a white shirt standing with hands on hips in front of a giant black chalkboard with a credit score scale drawn on it
There’s absolutely no denying that maintaining your credit score can be both stressful and confusing. Sure, you can try to do everything possible to assure that your credit report is in tip-top condition, but there are still several unforeseen factors that end up compromising your good intentions. For example, do you know what the difference is between a soft inquiry and a hard inquiry?

If you’re not aware of the difference, I suggest you check out some of our details below. When it comes down to it, the best way you can stay on top of your credit is by being aware and logical. How do you acquire the skills needed for these two attributes? To start, you will want to be knowledgeable regarding the subject of credit, as ignorance won’t assist you if you’re in some kind of legal trouble.

Regardless of your credit issues, you shouldn’t have too many issues securing a vehicle from Buy Here-Pay Here car lots in Cincinnati, Ohio However, it’s still worthwhile to improve your credit, and the worse your score is, the more you’ll ultimately be paying for big purchases like a car. The best way to go about doing this (and preventing this from happening in the future) is to learn about the difference between various credit inquiries…

How Does a Soft Inquiry Differ From a Hard Inquiry?

It’s actually pretty simple to distinguish the differences between a soft inquiry and a hard inquiry. Soft inquiries happen when someone or something (either a person or company) refers to your credit report as a background check. This process would include checking your credit score (whether online or through some alternative medium) or getting preapproved for a loan.

These checks can occasionally happen without your permission, but this luckily won’t have any negative affect on your credit score. In this case, since the credit checker is simply telling you the likelihood that you’d receive a loan, it’s considered “promotional.” These inquiries will appear in your credit report, but they’ll have zero impact on your credit score.

A hard inquiry is when a potential lender takes this information and uses your credit report to make their decision. This is fairly common practice, as hard inquiries can happen when you’re applying for a credit card, a car loan, a mortgage loan… basically any type of money-lending service. These hard inquiries can also occur when you are applying to rent something (like a house or car), or even when your bank is simply trying to confirm your identity. This, unfortunately, doesn’t leave the most flattering mark on your report.

Now, don’t mix these hard inquiries up with a simple online search of your credit. Accessing online tools (like Credit Karma) won’t hurt your credit score, and you can access these sites as many times are you want.

Regardless of the circumstances, if you’re worried about your credit score being affected, simply call the company or bank and ask which kind of inquiry will be made. If you feel a hard inquiry was made without your approval, you should dispute the decision with the credit bureau.

How Will a Hard Inquiry Hurt My Credit?

Luckily, a hard inquiry shouldn’t hurt your credit too much. As Jenna Lee of explains, a brief credit history, an abundance of credit inquiries, or even a low number of financial accounts could make a more drastic impact on your score. However, in regards to hard inquiries, there are still several factors that you should be accounting for.

For example, a large number of hard inquiries on your credit report will set off a red flag to creditors. While you may have done absolutely nothing wrong or malicious, credit-checkers could negatively interpret the abundance of hard inquiries. After all, these inquiries could be an indication that you’ve either tried and failed to previously get your desired loan, or it could be a sign that you’ve been absolutely desperate in your search for money.

These inquiries will usually stay on your credit report for two years. It is temporary, which is a relief. However, you never know when you’ll have to rely on your credit score in the future.

Is There a Way to Avoid Hard Inquiries Entirely?

Unfortunately, that’s just not possible. If you’re preparing to apply for a credit card or loan, your creditor is going to do a hard inquiry. There’s absolutely no way around it, end of story.

Fortunately, if you’re shopping for a deal on a mortgage or auto loan, various credit scoring services will combine various inquiries into one. This means you won’t have to worry about referring to multiple services, and it’s actually advantageous to take advantage of multiple sources.

If you decide to go down this path (and we suggest that you do), be timely. These creditors will certainly recognize your strategy (after all, they see it daily), and they’ll often assign a deadline to make a decision. If you exceed this deadline, then you should be prepared for multiple hard inquiries on your credit report.

Overall, as Lee points out, it’s the best idea to only apply for loans or credit cards that you’re confident you’ll be approved for. Otherwise, the frustrating consequences could have a negative impact on your future finances. There’s certainly a minor risk that accompanies getting a hard inquiry on your credit report, and you’ll have to determine whether the risks outweigh the rewards. Usually, it’d be worth your time and effort to pursue this information, but just be aware of the potentially negative consequences.

If you have any questions regarding a loan, particularly when it comes to cars, visit McCluskey in Cincinnati Ohio.
The helpful staff could find a financing plan that is both fair and reasonable, and you could soon be driving off the lot in a different car!