Most consumers are aware that credit inquiries can potentially lower their credit score. Applying for new lines of credit typically require a hard-pull inquiry on a credit report, thus lowering the score. When applying for a bank account, a copy of your credit report is obtained and shows as an inquiry, even though you are not requesting credit. Many wonder how this will impact their score.
Hard and Soft Inquiries
A hard-pull credit inquiry is when an individual authorizes a lender to obtain a copy of their credit report. A soft pull inquiry is when the individual checks their own credit report or it is involuntarily pulled by a potential creditor. For example, a pre-approved credit card application is a soft pull inquiry. According to Credit-factor.com, soft pull inquiries do not affect your credit score.
Checking Account Inquiries
Banks have the option of doing either type of inquiry, hard or soft pull. If the bank wants the pull to be soft, they must enter a special code in their account system when they begin the customer's application. If the checking account is going to have overdraft protection or a debit card, a mandatory hard pull inquiry will occur.
How This Affects a Score
One hard pull inquiry does not typically lower a credit score significantly. By keeping other credit inquiries to a minimum, the checking account application should not lower the score much. If a person is seeking additional lines of credit and has applied for multiple credit cards, they may want to consider opening the checking account after the lines of credit are approved since another inquiry may be enough to impact the interest rate.
0 comments:
Post a Comment