New Delhi, Sept. 25 -- When lending institutions review your credit report, they initiate what is known as a credit inquiry. This is basically a background check of the personal loan applicant. These inquiries are categorised as soft and hard inquiries.

It becomes vital for borrowers to clearly understand the fundamentals of these inquiries and the main differences between them. These aspects are briefly explained below:

Note: The differences discussed above are illustrative, and they may vary depending on the specific lender policies and credit bureau practices.

Soft inquiries are simply routine checks that occur when one reviews their credit report, when lending institutions extend pre-approved offers, or when employers perform backg...