new Delhi. Everyone wants that they get the best deal on the applicaton for the loan. Due to this, many people knowingly and unknowingly apply for it in many banks. But do you know that doing so can cause a lot of damage? This can also have an impact on your credit score. Due to which you may face problems in getting loan. So what are the things that should be kept in mind while applying for loan, know.
Hard inquiry drops rating
When you apply for a credit card with a lender or bank, they put a hard inquiry with the credit bureau to know your rating. By doing this, the credit bureau’s rating of your credit score is reduced somewhat. Credit score points will be automatically reduced by the number of times you apply. The loan may be difficult to pass if its limit is too low. Because the lender is not considered trustworthy.
What is a hard inquiry
Inquiries sent to the credit bureau to check the rating of the applicant. It is inquired about you. Since this application is based, it is called hard inquiry. This affects the credit score. A low rating leaves a negative effect that lasts for about 2 years. In the meantime, you may face problems if you apply for a loan.
Work done from soft inquiry
If you want to know about the offers from different banks or finance companies, then you can do a soft inquiry. For this you can talk to customer care of banks or companies. Also you can check on their website. Since it is not in writing, it does not affect the credit score. With this, you can easily check the loan deal. Also, you will not have to fill the form by completing formalities at different places.