What Is a Soft Inquiry?

A soft inquiry, also known as a soft credit check, occurs when you or someone else checks your credit for non-lending purposes. Examples include:

• Checking your own credit score
• An employer or landlord running a credit check with your permission
• A lender preapproving or prequalifying you for an offer

Soft inquiries do not affect your credit scores because they are not associated with a formal credit application.

What Can Lower Your Credit Score?

While soft inquiries do not impact your credit score, several other factors can. Here are the key elements that influence your FICO® Score:

Payment History

Timely payments are crucial. Late payments, especially those over 30 days, can significantly lower your score.

Amounts Owed

Your total debt and credit utilization ratio (the percentage of your credit limit you are using) are important. A utilization rate above 30% can hurt your score.

Length of Credit History

A longer credit history generally benefits your score. Avoid opening new accounts frequently to maintain a higher average age of accounts.

Credit Mix

Having a variety of credit types (credit cards, loans, etc.) can positively impact your score.

New Credit

Each new credit application results in a hard inquiry, which can lower your score by up to five points. Multiple inquiries in a short period can have a compounding effect.

How Often Can You Check Your Credit Score?

You can check your credit score as often as you like without affecting it. Regular checks are advisable, especially before applying for new credit. This helps ensure there are no issues that could hinder your approval chances.

Additionally, review your credit report at least once a year to verify its accuracy. You can obtain a free credit report from each of the three major credit bureaus weekly through AnnualCreditReport.com.

How to Check Your Credit Score

Accessing your credit score has become easier. Many financial institutions offer free FICO® Score or VantageScore® access to their customers. If your institution does not, you can check your FICO® Score for free through Experian.

Remember, most lenders use your FICO® Score for credit decisions. Different lenders may use different versions of the score, but checking your FICO® Score gives you a good idea of where you stand.

Tips for Improving Your Credit

Regularly checking your credit score is essential for building or rebuilding your credit. Here are some tips to help you improve your credit score:

• Get caught up on overdue payments and pay all debts on time.
• Keep your credit card balances low, ideally below 30% of your credit limit.
• Consider becoming an authorized user on a family member’s credit card with a positive history.
• Avoid applying for new credit unless necessary.
• Use services like Experian Boost® to get credit for paying utility and phone bills.

By following these tips and maintaining good credit practices, you can work towards a better credit score.

Contact O1ne Mortgage for Expert Mortgage Services

At O1ne Mortgage, we understand the importance of a good credit score in securing favorable mortgage terms. Our team of experts is here to help you navigate the mortgage process and find the best solutions for your needs.

Call us today at 213-732-3074 for any mortgage service needs. Let us help you achieve your homeownership dreams with confidence.