14 Oct Hard vs Soft Credit Inquiries: Effect on Score

When it comes to managing your credit and making smart borrowing decisions, it helps to understand the difference between hard and soft credit inquiries. As a credit-active consumer, it is important to protect your credit score. Soft inquiries are necessary as credit report checks boost financial confidence, while also revealing potential issues you may need to address.

A good credit score counts in your favour when applying for loans – creditors are more likely to approve your application, and you may qualify for better interest rates and higher credit limits. On the same note, a bad credit score will impact your ability to access credit. How do you know what your credit score means? Check out credit score 101: a simple breakdown to make sense of the numbers. Let’s consider hard vs soft credit inquiries and their effect on your credit score:

Soft Inquiries:

A soft inquiry means your credit report is being accessed without impacting your credit score. In most cases, this type of inquiry occurs when no credit is being requested. Lenders may simply need to assess your creditworthiness, or you might want check your credit score to keep track of your financial health. Examples of soft inquiries include checking your own credit report, background checks by insurers or employers, prequalification credit offers, and credit monitoring services.

We recommend checking your credit report regularly to stay updated about what is being reflected, and we offer a FREE CREDIT CHECK online for quick and easy access. If you’re struggling to improve your credit score or are having difficulty with your debt obligations, we are here to help you through it. We take a personalised approach to helping South Africans overcome their credit and debt setbacks.

Hard Inquiries:

Unlike soft inquiries, hard inquiries do impact your credit score, although the effect is normally temporary (about 12 months). If you are applying for credit, an account, or a loan, or are requesting to increase your credit limit, financial institutions will do a hard inquiry to establish your creditworthiness.

Avoid making multiple applications for financing in the same time frame, as this will reflect on your credit report. Creditors see this as a warning sign that you’re struggling financially, and they may be less likely to approve applications. Too many hard inquiries in a short space of time will also cause your credit score to take a knock. It is best to space credit applications out by a few months.

Rebuild Your Credit Score

Now that we’ve covered hard vs soft inquiries and their effect on your score, you can take control of your credit report. With us, you can check your credit score without harming it, empowering you to make the best financial decisions moving forward.