Only 19% of Consumers Know the Difference Between a Hard and Soft Credit Inquiry


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Aaron Berger
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A February 2010 survey of 1,000 U.S. consumers revealed that just 19% know the difference between a hard credit inquiry and a soft credit inquiry. Also, 26% of the people who claim to know what a credit score is understand the difference between a hard and soft credit inquiry. The The results are part of the First Quarter 2010 FreeScore.com Consumer Credit Score Awareness Study*, a January 28–February 2, 2010, online poll of Americans age 18+.

 

Hard Credit Report Inquiry:

A request from a lending institution to see a person's credit file when the person applies for a line of credit. Such inquiries can stay on a credit report for two years. A hard inquiry or two shouldn't hurt a credit score, but a lot of inquiries in a short period suggests an urgent need for more money, which can put the borrower in a higher risk category.

 

Soft Credit Report Inquiry:

An inquiry on a credit report that doesn't affect a credit score. Businesses conduct soft inquiries for reasons other than credit applications. A request to see one's own credit report and an employer who requests a credit report are examples of soft inquiries. Credit bureaus report them, but they don't usually appear on credit reports purchased by consumers or businesses.

Survey results also revealed the following about those who understand what a credit score is:

31% of men know the difference between a hard and soft inquiry versus 23% of women.

men are more knowledgeable about the difference between a hard and soft inquiry

Those with household incomes above $75,000 per year have a greater awareness of the difference between hard and soft credit inquiries:

Consumers with higher income have greater awareness of the difference between hard and soft credit inquiries

Those who check their scores more frequently claim to understand the difference between soft and hard inquiries on their credit reports (34% vs. 17%).

 

* The data for the First Quarter 2010 FreeScore.com Consumer Credit Score Awareness Study were collected through Survey Sampling International in Shelton, Connecticut. Results have a margin of error of +/- 5%.

 

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