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 silk gloves
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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 soft credit check? A soft credit check is when your credit report is pulled but you haven’t applied for credit. For example: Insurance companies or potential landlords may look at your credit report to assess risk; potential employers may do background checks.
Detailed explanation-3: -Checking your own credit reports won’t hurt your credit score. It’s a soft inquiry-and you can check your reports as often as you’d like without any effect on your scores. Credit journeys begin with credit reports.
Detailed explanation-4: -You can view the soft inquiries on your credit reports. If you want to get copies of your credit report, you can request one free copy from each major credit bureau (Experian, Equifax and TransUnion) every 12 months on AnnualCreditReport.com.
Detailed explanation-5: -Credit checks are performed by lenders, credit card companies, and other service providers that want to make sure you’ll meet ongoing financial obligations if they do business with you. Hard credit checks happen when you apply for new credit. They’ll hurt your credit score, but soft checks won’t.