Napa Mortgage News

When it comes to your credit report, it is important to check on  it from time to time and make sure all information is accurate and timely.  When a third party reviews your credit score it is referred to as an inquiry.  All inquiries are not exactly treated the same though. Some will actually hurt your credit score and then others do not.  Whats referred to as a "soft pull" in the credit world is very different from a "hard pull" which will affect your fico score.  
The "soft pull" is a term that refers to someone looking at your credit but it does not adversly affect your credit score.  Most of the time you won't even know that this has happened.  An example would be when you receive a solicitation in the mail offering you a credit card,  most likely the credit card company has already done a "soft pull" to see if you even qualify before they send you their information. Even some mortgage lenders will use a "soft pull" in their marketing and solicitations to see if you fit their qualifications before reaching out to you.  Potential employers use it as a part of their background check, and the companies you currently have credit cards with use it to check up on you from time to time.
When you open a new bank account, they will also do a "soft pull" to verify that you are who you say you are.  When you pull your own credit report (which you should do at least once a year) that is also considered a "soft pull" and does now affect your fico score.

On the other hand..........a "hard pull" DOES affect your score.  Anytime that you get a loan or a new credit card, the lender will conduct a "hard pull" on your credit report.  This information stays on your report.  For this reason....it is important to guard your credit report from too many "hard pulls".   Sometimes just getting a credit card at a department store to save 10% on your purchase that day will be enough to really hurt your score.  Usually not worth it! Some banks will even use a "hard pull" when you open a savings account with them so be sure to ask in advance....especially if you are getting close to getting a new home loan. Alot of times the incentives for new accounts are not worth the hit to your credit score so be sure to check in advance.
A good rule of thumb for your credit report is to try to avoid any inquiries that are considered hard pulls.  By limiting them.... your credit will be in good shape and you can qualify for the best interest rate available to you when it comes time for you to apply for a loan that you truly need!  At Custom Lending Group...we can help you improve the score you have and get you the best loan possible.