Myths and Facts About Credit PullsYour credit score is very important. Most people already know this fact which is a great step in the right direction. But do you know what a credit pull does to your credit score? Below are a few common myths about credit pulls and facts about your overall credit.

Myth: There is only one kind of a credit pull and it always affects your credit.

Fact: When companies look at your credit there are two different kinds of credit checks, a hard pull and soft pull. When signing up for a credit card to save 10 percent on your purchase, stores do a hard pull on your credit before giving you that credit card. A hard pull should only be done when applying for a loan, a necessary credit card or insurance, as it does affect your credit score by about five points for six months.  A soft pull is the second kind of credit check and it does not affect your credit. You can have several soft pulls on your credit and it will not affect your score. These are often done by existing credit card issuers checking up on you or by a potential employer. It’s important to know which type is being performed on your credit.

Myth: Hard inquiries negatively affect your credit score by a lot.

Fact: Hard pulls do affect your credit. The exact amount of points isn’t known for sure, it depends on a complex mathematical formula to figure the exact amount of points that are deducted. It is very common to see anywhere from 3-5 points deducted from your credit score for each hard inquiry.

Myth: Shopping around for a loan hurts your score.

Fact: It is true that too many inquires to your credit will lower your score. If you are shopping around for a loan and your credit is being pulled, keep your search within a 14-day window, as credit bureaus can then attribute the activity to loan shopping instead of repeated pulls. And when you’re ready to purchase a home, speak with a home loan expert to see how your credit score will affect your mortgage rate.

Myth: Declaring bankruptcy gives you a clean slate of credit.

Fact: Declaring bankruptcy can stay on your credit report anywhere from 7 to 10 years. Do whatever is necessary to avoid filing for bankruptcy.  Filing for bankruptcy should be a last resort.

Myth: Paying off past debts will make your credit report instantly better.

Fact: Your credit report is the history of payments not a glimpse of your credit currently. Any payments you missed will affect your credit score even if you pay off the debt in full.

Myth: I pay my bills on time; I do not need to check my credit score.

The Consumer Federation of America and the National Credit Reporting Association analyzed credit scores in the summer of 2002 and discovered that 78 percent of files were missing a revolving account in good standing. The same study also found that 33 percent of files lacked a mortgage account that had never been late, and 29 percent contained conflicting information. It is important to get your credit checked at least once a year to make sure the information is correct for better or for worse.

Myth: All credit reports are the same.

Fact: Not all credit reports are the same. It is important that your credit be checked by all three major credit bureaus: TransUnion, Equifax and Experian. Quizzle is great place to have your credit checked without having to give your credit card or Social Security number.

Myth: Bad news comes off in seven to ten years.

Fact: Chapter 13 comes off your credit seven years after the filing date. Chapter 7 bankruptcy (exoneration of all debt) stays on your credit for 10 years.

Your credit score is something you always want to protect and do what you can to keep in good standing. It determines so much for you financially, like interest rates, loans you can obtain and so much more. With the right knowledge, you can make good decisions about your financial portfolio and take the steps necessary to maintain a solid credit score.

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This Post Has 6 Comments

  1. This information in inaccurate, I just checked my credit and the only thing I have on my report are Hard Pulls. The information given here says that they will stay on your report for 6 months. There are several that are scheduled for 2 years. I had a few credit unions competing for my business, new car, and they have been on the report for over a year and are scheduled to come off in another year.

    1. Hi Dave,

      You would only see hard pulls because soft pulls don’t show up on all credit reports. It depends on the bureau. Also, the post is not saying that a credit pull only stays on your credit report for six months. Rather, it says it affects your credit score by five points for six months as an example. I hope this clears up any confusion.

      Thanks,
      Kevin Graham

  2. Just called to get some info about getting preapproved for a mortage and the woman needed to check my credit, she said it would only affect my score little to non, in under 8 hours I got a notification saying they did a hard inquiry and my score went down 13 points!!! Now how am I gonna get a mortgage??? I’m pissed and now I have to raise hell to fix this. I DON’T RECOMMEND QUICKEN LOANS AT ALL! THEY ARE SCAMMERS

  3. Steven, I had the exact same thing happen, they assured me that this was a soft pull and not a hard check. When i called back i was told I was lying, then I played the recorded audio for them since I record all of my calls and the lady got really mad and hung up on me because she said I didn’t have her permission to record her.

  4. I called Quicken to get more information about a loan, and without my authorization, they did a “hard pull” of my credit. It did in-fact lower my credit score; for that reason, I will never use or suggest quicken to any of my associates or friends.

  5. The inquiry thing kinda pisses me off though. There’s no reason I should be penalized for how much my credit is checked, it should only count for how often I actually open a new account or something.

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