As we’ve been going through the process of buying a house, I noticed I became more and more aware of my FICO score. I wanted to make sure we were raising our credit scores by choosing sound financial habits.

What’s a “Hard Pull” on a Credit Check?

Basically a “hard” pull is a credit check that can affect your credit score.  Hard pulls are visible to anyone who is checking your credit report, while soft pulls, like when you check your own report, are only visible to you.

FICO’s site explains a bit more on hard credit inquiries:

There are a few important considerations to keep in mind about inquiries:

1. All hard inquiries do not impact one’s score, as sometimes a single inquiry can impact it and sometimes you can have three or four that don’t.
2. When a hard inquiry impacts your score, the effect is usually only a few points.
3. While inquiries remain on your report for two years, the scoring formula only considers them for the first year.

To answer your question, inquiries are taken into consideration by the FICO scoring formula because research has shown that consumers who have recently taken on new credit obligations are more likely to be late on future payments than those who haven’t. And inquiries are the earliest indicators that new credit is being sought out.

Looking at this information, I’d play it safe and not have too many hard credit checks done; there is a chance that my credit score can be lowered. Please remember, though, if you’re making a purchase like a house or a car, this will not be an issue, as lenders expect to shop around for a good deal.

When Can I Expect a Hard Credit Check?

If you’re opening a credit card or you’re opening a line of credit, you’ll probably have a hard credit pull on your record. You may check with a customer service representative if you decide to open a new bank account, as some banks do a hard credit inquiry.

Get Your Free Credit Report

Make sure your credit report has correct information on it. If you want to check your credit report for free (completely free, not a free trial), then go to AnnualCreditReport. This can help you see if there are any errors on your credit report that you have to fix. it’s worth a look, since fixing errors can raise your credit score.

Photo Credit: liewcf

Be Sociable, Share!

• 

• Carnival Time!   Photo Credit:digitaloxygen.ca Patrick at CashMoneyLife is hosting the first ever Carnival of Financial Goals. It's a great idea, as you can get motivated by other people's goals. I'm working on paying off my car loan. The carnival also includes tips to achieve your goals as well. Please check......
• Guide to Fixing Your Credit Report and Raising Your Score Sometimes I get questions sent to me through the email. Some questions are very specific and some a bit more universal. /caption] Reader Asks a Question About Credit Reports One question I received through email this week was about credit reports and scores. Here's the gist of the question: Should......

• How to Improve your FICO Score It is important for you to understand that trying to raise your FICO score is quite similar in nature to losing weight. There is no quick fix and it is absolutely going to take time. Quick fix efforts for improving your credit score can most certainly back fire if you......
• Free Gift: Keeping Your Cool While Daytrading or Swing Trading Hard to believe, but today is my birthday! I decided to begin this new year of my life by giving a gift to you. No payment or even opt-in required. This is not even a promotion for anything I'm selling about daytrading. It is a brief 10 page PDF report......