CREDIT » CREDIT REPAIR & REPORTS

If someone has ever requested to pull your credit report, it's likely that you were told that it would be a hard check or soft check, leaving you to wonder what the difference is between the two. There is a difference and it is something that should be understood before you allow someone to check your credit at all. So to help you differentiate, let's look more closely at what they are and how they can affect your credit report or credit score.

The differences between a Hard Credit Check and a Soft Credit Check:

Hard Check
A hard check is a little bit more heavy-handed. These inquiries occur when a lender is looking at your credit to decide whether you should receive a loan or credit card that you've inquired about. Hard checks are viewable by others and can sit on your credit report for up to six months, actually lowering your credit score by about 5 points. While this may not seem like a huge penalty, if you have too many hard pulls sitting on your report, those 5 points can add up pretty quickly.

Soft Check
When a company conducts a soft check on your credit report, it means that they are conducting an inquiry of certain information on the report, but don't have access to everything. As a result of a soft check, your score won't be affected at all. Examples of when a soft check might occur are: when companies are checking to see if you qualify for a pre-approved credit card or loan, and when employers are looking at your report - this is considered a soft check.

If someone else looks at your report other than you (i.e. employer), that person will not be able to see who has been looking at your credit report. So the only way that a soft check can affect you at all is how the company will judge you based on the information they see.

Before you agree to any credit check, ask to see if a hard check or a soft check will be conducted - that way you will have more control on your credit score.

You've probably heard all about responsible adults who have succumbed to bad credit through bad choices, and as a result have suffered immensely. As a college student, you are probably interested in ways to avoid unnecessary problems by making good choices early on. This is a great thing to do.

The good news is that you can get started on the right track now by learning how to build your credit while still in college. This way you can learn responsible actions and have a good credit score.

Here is how you can start building your credit while still in college:

• Start by applying for your first credit card. What's fortunate (or maybe unfortunate) about wanting to apply for a credit card in college is that credit card companies are typically happy to oblige. Often times, credit card companies will set up booths on college campuses to lure students in. They'll hand out free t-shirts, laptop bags and hats, anything to get you interested in their card. This means it's not hard to apply for your first card (or second or third). Really, the challenge is maintaining control of yourself after you've received them.
• Don't abuse your credit privileges. The point of taking on a credit card is to build your credit rating, not abuse the privileges that have been extended to you. So as you apply for credit cards, it's a good idea to do so sparingly. In other words, only take on a few, use them to buy a couple of items and pay them off immediately. This will show that you know how to manage the credit extended to you responsibly.
• Learn more about credit before diving in. While it's great that you want to start building your credit history early, it's also good to first learn about credit before diving in. This is because if you start utilizing credit in a negative fashion unknowingly, it can be pretty difficult to fix what's been broken. Of course, you know the basics of building and maintaining good credit, including paying off your loans and credit extensions as soon as possible. But there's much more to learn to make sure you don't find your score dropping despite your best efforts. For instance, there's a myth that you should keep a balance on your credit card each month in order to build credit. That's simply not true, and does not illustrate responsible credit card usage.

Again, it's great to want to start building positive credit as soon as you can, but you want to try your best to learn the ins and outs before filling out too many credit applications. Only use your credit card to buy the things you can pay for in cash, and only buy the things you need. Soon, you'll be graduating to the real world with a perfect credit history.

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