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Understanding Credit Reports and Inquiries

Welcome to O1ne Mortgage! In this article, we will guide you through the essentials of checking your credit report, understanding the impact of inquiries on your credit scores, and why these inquiries matter. For any mortgage-related needs, feel free to call us at 213-732-3074.

How to Check Your Credit Report

Checking your credit report is a crucial step in managing your financial health. You can access your credit report for free anytime by signing up for an Experian CreditWorks℠ Basic account. For more comprehensive monitoring, consider upgrading to an Experian CreditWorks℠ Premium account, which includes reports from TransUnion and Equifax, along with additional credit protection benefits.

Additionally, federal law entitles you to a free annual credit report from all three major credit bureaus (Experian, TransUnion, and Equifax) through AnnualCreditReport.com.

How Do Inquiries Impact My Credit Scores?

Inquiries, or requests to view your credit reports or scores, are categorized as either “hard” or “soft” inquiries based on their potential impact on your credit scores:

Soft Inquiry

A soft inquiry occurs when you check your own credit report or score, or when a monitoring service you authorize does so. These inquiries are noted on your credit report but do not affect your credit scores. Examples include checks by lenders with whom you have existing accounts or credit checks for marketing purposes.

Hard Inquiry

In contrast, a hard inquiry is added to your credit file when a lender requests your credit report or score to process a credit application. This type of inquiry can slightly lower your credit scores, typically by less than five points, and the effect is usually short-lived. As long as you maintain timely debt payments, your scores should rebound within a few months.

Why Do Inquiries Have an Impact on Credit Scores?

Hard inquiries can be a concern for lenders as they may indicate new debt that hasn’t yet appeared on your credit report. Credit scoring systems account for this uncertainty by deducting a few points from your scores. However, if you continue to make on-time payments, your scores will typically recover within a few months.

The Bottom Line

Regularly reviewing your credit reports is a smart practice to identify and correct inaccuracies and to monitor for unauthorized activity, which could signal credit fraud or identity theft. Checking your credit report will not harm your credit score and can help you protect your credit and improve your long-term credit health.

For any mortgage-related inquiries or assistance, don’t hesitate to contact O1ne Mortgage at 213-732-3074. We’re here to help you navigate your financial journey with confidence.

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