When You Apply For Credit Cards Online It Can Decrease Your FICO Score!
When you apply for credit cards online it can knock points off your credit score. A credit card finder soft pulldoes not hurt your credit. Applying for a credit card will not significantly hurt your credit score, but it could impact it a bit. It takes money to make money, it takes seeds to plant crops and it takes an inquiry to start building credit. Having an inquiry on your credit report isn’t bad in and of itself. The problem arises when you have multiple inquiries. In addition, you need to understand the difference between a “soft pull” inquiry and a “hard pull” inquiry.
Inquiries from Mortgages
When you shop for a mortgage you will have your credit pulled by every company that you apply to. Fortunately, the FICO people know that it makes sense to shop around for the best rates so they allow you to have a number of mortgage related “pulls” within a 6 month period without penalty. However, the same is not true of credit card inquires.
Apply for Credit Cards Online: Too Many Credit Card Inquiries
Every time you apply for credit cards onlineyou have an “inquiry” placed on your credit report. This means that the three credit bureaus (Experience, Equifax and TransUnion) will note this inquiry on your report and adjust your FICO score by lowering it a few points, according to Forbes. This type of inquiry as a result of your applying for credit is called a “hard pull”. Anytime you apply for something or authorize someone (mortgage, car company, bank) to pull your credit it will be a “hard pull.”
A Credit Card Soft Pull
There is another type of inquiry, called a “soft pull”. These are done by credit card companies who are considering sending you special offers or raising your credit limit, or also by background checks, insurance checks, employment checks or your own checking of your credit. These types of inquiries do not damage your credit score. So when you get that “pre-qualified” for a credit card letter in the mail that company likely performed a “soft pull” of your credit history before sending you the offer. But they will do a “hard pull” if you send in the application or acceptance letter. There are, though, some options when you apply for credit cards online – you may be able to get prequalified for a card. Be sure to ask questions or read the fine print so you know it is a soft pull.
Is an inquiry bad?
A credit card finder soft pull, or other soft pull, will not hurt your credit. A hard pull inquiry or two here and there won’t hurt you, really. However, if you go crazy and apply for a dozen credit cards at one time it just might. Those lost points will add up. In addition, if a creditor actually looks at your report (as mortgage companies and car sales companies do) they may wonder why you are trying to extend yourself so far and think of it as a bad sign. So exercise caution.
Exploring Your Options without Inquiry
Before you apply for a credit card explore your options a bit. Use a cardmatching tool, like the one at creditcards.com, to help you find a card that suits your needs and your credit. Ask the company what their requirements are and know your own credit score. This way you can apply only for cards that you have a fair chance of being approved for.
Check Your Score
Forbes suggests that you feel free to check your credit score as often as you wish. In fact, by tracking your score over time you can better understand how the scoring system works and how your behavior impacts your FICO score. Also remember that you can use online applications to check your credit card application status, rather than having to wait for a letter to come in the mail.
Reference
Forbes. http://www.forbes.com/sites/moneywisewomen/2012/03/29/the-top-6-misconceptions-about-credit-scores-2/
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