Understanding Credit Inquiries and Deduping

What Is a Credit Inquiry?

Credit inquiries play a crucial role in the personal finance world. They influence a consumer’s credit score and ability to obtain loans or lines of credit. For how important it is, many people find credit inquiries to be a somewhat confusing aspect of their finances. Simply put, a credit inquiry (also known as a credit check or pulling your credit) occurs when someone accesses your credit report. Credit reports are pulled for a few different reasons, such as when you apply for a credit card, loan, or mortgage. There are two types of credit inquiries – soft and hard. This blog aims to explain the difference between soft and hard credit inquiries, deduping, and what it all means for a consumer’s finances.

Soft Inquiries

A soft credit inquiry (also known as a soft pull) doesn’t involve a credit decision and doesn’t impact your credit score. They are typically initiated for informational or pre-approval purposes and are a normal part of various financial processes. Common instances of soft credit inquiries include –

• Pre-Approved Credit Offers
• Personal Credit Checks through a Monitoring Service
• Employment Background Checks
• Insurance Quotes
• Account Reviews by Existing Creditors

Hard Inquiries

A hard credit inquiry (also known as a hard pull) occurs when a potential lender pulls your credit during the decision-making process for a credit application. Contrary to soft inquiries, hard inquiries do have a temporary impact on your credit score. Therefore, it’s important to be mindful of the frequency of hard inquiries. While hard pulls are a natural part of the credit application process, it’s important to manage them responsibly. If you’re able, space out credit applications and be selective about new credit to help minimize the impact on your credit score. Common instances of hard credit inquiries include –

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