Most people are familiar with the three big credit bureaus: Experian, Equifax, and TransUnion. For those who aren’t aware, these companies compile information about your credit history and report it to other businesses. They don’t report all of your debts or credits – only what they see on your credit report, which has multiple sections.
The Difference Between Hard and Soft Inquiries
In order to understand why soft and hard inquiries are important, it’s helpful to first understand what a credit score is and how it works.
Each time you apply for credit, your financial history is assessed to determine your creditworthiness and thus, your overall score. If you’re denied by a lender, that will show up on your report as well. The number of times you apply for credit directly impacts how lenders view you—but not always in a negative way. As long as you don’t have a hard inquiry on file from an application that was denied (or approved), having multiple applications can be viewed positively.
The Impact On Credit Scores
First, you need to know how these things work. Just like with other lenders, if you decide to use your newly-approved line of credit (credit limit) and rack up debt against it, that activity will affect your score negatively over time.
What information is requested from third parties?
To initiate your credit check, lenders request your personal information from at least one of three major credit bureaus. (Equifax, Experian and TransUnion). This includes your name, Social Security number, income and job history. The lender also requests financial information about people with whom you’ve recently applied for a loan or credit card. The process is automated and instantaneous; there’s no way to stop a lender from receiving that data on you. Additionally, when you make an inquiry with a new lender (or even attempt to log into your account), they’ll see that you’re seeking access to new credit resources—and they might make a further inquiry into what type of account you’re looking for as well as how many other companies are currently trying to access your private information.
How long do they keep this information for?
They want to avoid loaning money to people who might not pay them back!
Most people who apply for a credit card will get a response within 60 seconds of completing their application, but what most don’t know is that many companies take into account more than just your credit score.
When asked if being marked as a bad card user could hurt your chances of getting approved in future applications, she said no and suggested checking out some forums like kboards where former employees answer consumer questions on a variety of topics.
She was unable to provide additional information about inquiries made by other companies (such as Walmart) or apps (like Venmo).
Would it be better if you were getting paid by all three bureaus?
It’s not uncommon for merchants to get paid by multiple credit bureaus (e.g., Experian, Equifax, and TransUnion).
While it might be tempting to create a separate account with a different bureau if you aren’t receiving payments from all three, it’s probably not worth your time. Creating an additional profile will only cause confusion in both your business reporting and internal accounting processes.
The better alternative is to speak with your merchant services provider about why you aren’t getting paid by certain payment providers or banks; they may have tips that can help resolve these issues quickly and efficiently!
If you haven’t already asked them, give them a call today to see what they have to say!
Is there a way around it with an account they don’t use often enough or have bad feedback with, but have good feedback overall on the marketplace where you want to sell (feedback doesn’t affect who gets paid at amazon)
YES.
