Hard and Soft – Not Tacos, Credit Inquiries

There’s widespread misunderstanding of the effect on your credit score when someone checks your credit. You checking your own credit should never have an impact. When a business or other creditor checks your credit, it MIGHT have a negative impact. The difference lies in whether the inquiry is “hard” or “soft.” This is a reason not to apply every time a store offers you 10% off if you apply for their credit card. That’s a hard inquiry, and too many of them can drag your score down. It makes you look like you’re out on a credit-getting spree, preparing to charge up a storm and risk being unable to make the payments.

When you arrange a cell phone contract, ask the vendor if they are going to check your credit, and if so, whether the inquiry will be hard or soft. They can do soft, but they don’t always.

If you rent a car using a debit card, the company may very well check your credit, and without mentioning it to you. Given a choice, it’s better for your credit to use a credit card instead of a debit card when renting a car.



Marie Brack is the author of Frugal Living for the 21st Century: Adventures in Using Your Money Wisely. It’s available on Amazon.com in both Kindle and paperback versions.





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