There is a lot of confusion about soft and hard inquiries and the subject can be confusing. Some factors include credit card promotions, limit increase reviews, requesting a loan, or requesting a personal loan through your bank. These different types of inquiries have different effects on your credit report and there are some types you never want to have happen.

Hard Inquiries

These types of inquiries are requested by the consumer through a financial institution or loan generators. These financial institutions or loan grantors include: Car Dealerships, Lenders, Credit Card Companies and some Pay Day Loan Companies.

Keep in mind that these types of inquiries are requested from the consumer through another organization in hopes to obtain an unsecured loan. This means that the consumer is asking to borrow money.

If a consumer is requesting to borrow money the loan grantor will need to determine the consumers credit standing or credit worthiness. This is will generate a hard inquiry.

Soft Inquiries

These types of inquiries are also requested by the consumer but for a different purpose.

Examples would include when a consumer pulls their own credit report, when a consumer applies for car insurance or applies for a new job, when a consumer request a credit limit increase on their credit card.

Federal Law states that a consumer shall not be penalized when pulling their own credit report. This is because consumers have the right to know what’s in their credit and what items are affecting their credit score.

When you apply or inquire about some form of loan, credit card or any type of account that you may think will affect your credit, just ask. Just ask if they run a credit check, ask if they perform a hard or soft pull. Being proactive will eliminate the guess work and you will feel more confident in your own actions.

Empower – Educate – Take Action

H & I Credit Solutions

A lot of consumers want to do something about their credit for many reasons. The problem is that most people do not know what they need to do to take that first step in repairing their credit. The first step to repairing your own credit is very simple.

Step One: You must find out what is on your credit report.

I’ll admit, that I thought at one point, I pay all my bills on time so there is nothing negative on my credit report. My thinking was completely understandable because, if I pay all my bills and I haven’t done anything to jeopardize my report then it should be ok, right? Well stop right there, just because you are a responsible consumer doesn’t mean that someone else hasn’t stolen your identity.

So back to the first step…

Obtain a copy of your credit report from all three credit bureaus. This will allow you to see what is being reported and what is not being reported on each credit bureau. You may find that something that you were completely unaware of is reporting on your report. Something that is not even yours, how would that make you feel?

There are a lot of different sources of which you can pull your credit report. On a previous topic, I discussed how to get your credit report for free from www.annualcreditreport.com. The choice of how you receive your credit report is up to you. After you choose a method, get your copy and look through it. So that is your first step. Remember, all negative items on your credit report have to be verifiable. If the negative items are not verifiable, then by law it has to be removed.

Take that first step.

H & I Credit Solutions

Surprisingly enough, it is not illegal to have a collection removed. The collection companies, by law, have the right to report or not report as they see fit. Having said that, let’s look at what a collection company’s main concern is.

Their main concern is to collect the debt and get reimbursed for their liability. The reason your debt is a liability is because they are unsure if they will be able to collect the debt. In return, they report the debt on a consumer’s credit file. If the main goal is to collect 100% of the debt, why would they care about anything else?

Now having said all of this, you are legally required to pay your debts. However, if the collection company cannot verify this debt and provide you with full validation of the debt they are claiming, you have the legal right not to pay until this information is validated. You have an option, you can actually negotiate your full payment, and in return they remove the collection account from all of the credit reporting agencies.

Your success may vary depending on the collection company.

If you have any questions regarding this process, please ask a professional credit analyst.

Empower – Educate – Take Action

H & I Credit Solutions