Soft Inquiry vs Hard Inquiry
For the following scenarios, I was informed that there'll be a soft inquiry involved
Opening a Checking account at a credit union
Requesting a Credit limit increase on a Credit card
Signing up for Comcast/Centurylink.
From what I understand, a soft inquiry is not supposed to affect my credit? But isn't that a false statement as a Soft pull is recorded as a credit inquiry which negatively affects my credit score?
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Soft inquiries do not negatively affect your credit score.
From Credit Karma:
Soft inquiries typically occur when a person or company checks your
credit report as part of a background check. Examples include employer
background checks, getting "pre-approved" for credit card offers and
checking your own credit score. A soft inquiry may occur without your
permission. Soft inquiries may be recorded in your credit report,
depending on the credit bureau, but they won't affect your credit
score.
That being said, the examples you provide may actually result in hard inquiries on your credit report. The CLI seems the most likely case where a hard inquiry will result rather than a soft inquiry, and I've read where Comcast will do hard inquiries as well. If you Google all three of your examples, you'll find cases either way. Each bank, credit union, or cable provider will behave differently, so it's difficult to predict what type of inquiry, if any, will occur.
Fundamentally, soft inquiries are checks where no credit is being granted as the result of the check. Because they don't represent borrowing they in no way indicate anything about your ability to repay and thus have no effect on your credit rating.
Hard inquiries, however, involve either the actual paying of money (the utility bills in your list) or the granting of credit, and thus are an indication of the lessening of your ability to repay additional borrowing.
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