SOFT CREDIT INQUIRY VS. HARD CREDIT INQUIRY
As a Canadian citizen, you would probably have had your credit score checked a multiple times by different units looking to invest in you, be it a landlord, a lender, or a prospective employer. If you have applied for too much credit, your score gets compromised on, and makes a negative impact on you.
There are two major ways by which your credit can be checked. There are a soft credit inquiry, and a hard credit inquiry. Both these kinds of credits have different variations to them, and are utilized with a different goal in mind. Understanding the differences between the two, and how they work, is essential in making sure that you are able to maintain the best credit score that you can.
Soft Credit Inquiry
A soft credit inquiry simply means that someone wants to check your current credit score. It could be a prospective employer, or to qualify for a new credit card. A soft credit inquiry is usually conducted to make sure that you are a viable asset, and that you will not default on your payments.
Hard Credit Inquiry
A hard credit inquiry is often overseen by lenders, if you wish to extend or increase your loan for some reason. A hard credit inquiry usually decreases your overall credit score slightly. However, if your finances are in a good shape, it does not affect you much. With a hard inquiry, your reasons for borrowing more money are looked into. An application for a mortgage or a personal loan usually lends an inquiry into your hard credit.