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:
- 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.
- When a hard inquiry impacts your score, the effect is usually only a few points.
- 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
