Soft Credit Check

What is a soft credit check?

Lenders will use your credit score to determine if you are eligible for a loan. They also decide on the terms they are willing to offer. Credit bureaus track when companies examine your credit score. However, no matter the outcome of those checks, “hard inquiries” can lower your score.

It is easier to understand the difference between a hard and a soft check so that you can plan your application for credit lines. This will help to minimize credit risk.

Your credit report will list soft credit checks.

Soft credit checks, also known as soft inquiries or soft pulls, are any credit report check that does not affect your credit score. Soft inquiries are background checks that don’t involve checking for new loan applications. In some cases, they may occur without your consent.

These are some common soft inquiries:

  • Check your credit report.
  • Potential employers will check your credit history to assess your financial stability and reliability.
  • If you have already signed up for a financial institution, your credit rating will be checked.
  • Credit card issuers will check your credit before sending you a preapproved deal.

All of your soft inquiries can be viewed on your credit report. This list lists every check as well as the name of each organization.

Soft credit inquiries vs. complex credit inquiries

Hard inquiries can have an impact on credit scores, unlike soft inquiries. When making a loan decision, prospective lenders conduct hard checks. Common examples include:

  • Requesting for a credit card.
  • You can get a loan to buy a car.

How to request for a mortgage

Hard inquiries remain on your credit report for two years. You should think carefully before requesting for any type of loan. It can reduce your credit score.

Request for loans with care

Good credit scores are essential for getting approved for new credit lines. They also increase your chances of receiving the best rates. It is vital to understand what type of activity could lower your credit score.

Although many companies will check your credit history and credit report, only hard checks to confirm your eligibility for a new credit line impact your credit score.

Keep your credit score high by only requesting for loans when you are required. You should submit all your applications quickly if you want to get the best rate.