Differences in credit inquiries and hard and soft inquiries

READER QUESTION

I have a new bank, and my mortgage company make hard inquiries without my permission. Is this a common practice?

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Bills.com Resident Expert
Dec 12, 2011
BILL'S ANSWER

Whenever a company pulls a copy of your credit report, the credit bureaus will list an inquiry on your credit report. Credit inquires fall into two general categories: "hard" inquiries and "soft" inquiries. Hard inquiries, which can negatively impact your credit score, appear when a potential lender checks your credit as a result of your applying for new credit. Soft inquiries appear when a company pulls your credit without your prior authorization, or when you pull your own report. For example, an unsolicited "pre-approval" letter from a credit card company will result in a soft inquiry. Soft inquiries are not disclosed to potential lenders when they pull your credit report, and they do not affect your credit score. The primary purpose of soft inquiries is to allow you to see who has been reviewing your credit report.

It is standard practice for the bureaus to post a hard inquiry on your report when you first apply for a mortgage loan. However, I do not know why a periodic review of your credit report by the lender would result in a hard inquiry. As stated above, hard inquiries result from your applying for new credit, not from established creditors pulling your report for review. If you think that the mortgage company's inquiries are being improperly reported, you should notify the credit bureaus of the problem. If the inquiries have been reported inaccurately, they should be willing to correct the problem. The contact information for the three major credit bureaus is below:

Equifax

800-685-1111

www.equifax.com

Experian

888-EXPERIAN (397-3742)

www.experian.com

Trans Union

800-916-8800

www.truecredit.com

I hope this information helps you resolve this problem and helps you Find. Learn. Save.

Best,

Bill

www.bills.com

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