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12.03.2019 : News
Does a credit check have an impact on your credit rating?
During a screening process, some candidates can be dubious regarding the credit check because they are afraid of negatively affecting their credit score. The answer is that it will depend on the type of credit check being done, as well as why a credit check is being done.
What is a credit history check?
A credit history check is a search for relevant information in a large consumer reporting database or its national equivalent where it exists. These reliable sources will provide detailed reports, including an individual’s credit rating, loans granted, missed payments, collections and bad debts, among other things. In short, this verification will reveal any information that could negatively affect a credit history.
The different types of checks and their impact on credit rating
Depending on the reason for requesting a credit file check, two types of investigations may be carried out. It is important to note that their impact on credit rating is different.
The credit check with impact
A hard inquiry is a request for information generally made when an institution or company needs an individual’s score and credit history when making a decision about whether or not to grant a loan. A check with impact could also be required to obtain a new credit card or car or mortgage loan approval.
It is important to note that credit inquiries with impact have the effect of lowering the credit rating by a few points for approximately six months. Once this period has elapsed, the effect is reversed. This is why it is usually recommended to mind the amount and number of credit you apply for shortly before applying for a mortgage.
The credit check with no impact
Soft inquiries are often requested by individuals or organizations when they have no intention of making a loan decision, although there are exceptions from one institution to another. Landlords and potential employers use them to assess the financial risk posed by a candidate. When you check your own credit history, it is a non-impactful credit check.
This type of credit report check has no effect on your credit rating. The results can only be seen by the person being checked.
Background checks for employment will not affect your credit score
In light of this information, you no doubt understand that some credit checks related to requests for loans or mortgages do indeed have a negative impact on the credit rating of the individual being screened, although those negative effects are only temporary.
Pre-employment screenings containing credit checks are considered as non-impactful inquiries and will not have any negative effect on your credit score. Individuals being screened by Mintz Global Screening for employment, volunteer work or internships can be ensured that their credit score will remain intact.
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