ECONOMICS
CREDIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Occurs where you check your own credit or a lender checks your credit to pre-approve you
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Occurs when a lender checks your credit in order to make a lending decision
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Occurs when a lender pulls your credit using a hammer
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None of the above
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Detailed explanation-1: -A hard credit inquiry takes place when you apply for a loan or credit card and the lender checks your scores to decide your loan approval. A soft credit inquiry takes place when you check your own credit score or when lenders give you an offer for pre-approved loans.
Detailed explanation-2: -What is a hard inquiry? When a lender or company requests to review your credit report as part of the loan application process, that request is recorded on your credit report as a hard inquiry, and it usually will impact your credit score.
Detailed explanation-3: -Hard inquiries (also called “hard pulls” or “hard credit checks”) happen when a financial institution, such as a lender or credit card issuer, checks your credit when making a lending decision. They may evaluate several factors such as payment history, the age of your credit, and your debt-to-credit ratio.
Detailed explanation-4: -Lenders perform hard inquiries when you apply for loans and other major lines of credit. The impact of a hard inquiry may depend on your credit history. While a hard inquiry can stay on your credit report for up to two years, it generally affects your score for one year.
Detailed explanation-5: -A hard inquiry, also referred to as a hard pull or a hard credit check, means the lender reviews your report in detail to help determine your creditworthiness. Here are more examples of situations that usually result in a hard inquiry: Applying for a mortgage. Applying for personal loans and auto loans.