A soft credit check is a credit check that does not require the person being checked to provide permission. Employers, landlords, and insurers often use soft credit checks to understand an individual’s creditworthiness without adversely impacting their credit score.
A soft credit check is initiated when an individual or organization requests a copy of your credit report from a credit bureau. Unlike a hard credit check, a soft credit check will not result in an inquiry on your credit report. Soft credit checks are used to determine your creditworthiness for a variety of reasons, including:
- To pre-qualify you for a credit card or loan
- To check your credit history before approving you for a lease
- To determine if you’re eligible for specific insurance policies
- To verify your identity
While a soft credit check will not impact your credit score, multiple soft credit checks in a short period can indicate to lenders that you’re actively seeking new credit. It could result in a hard inquiry being placed on your credit report.
How Do Soft Inquiries Impact Credit Scores?
A soft inquiry is a credit check that does not impact your credit score. Soft inquiries can occur when you check your credit report, when a creditor checks your credit for account maintenance, or when a business checks your credit for pre-approval of a credit card offer. Soft inquiries must indicate to creditors that you are actively seeking new credit. As a result, they have no bearing on your credit score.
While soft inquiries impact your credit score, creditors can still view them. This is why it’s essential to be aware of the types of searches that can be made on your credit report. Seeing an inquiry you don’t recognize on your report could signify identity theft. If you believe you’ve been the victim of identity theft, you should take steps to report it and protect your credit.
In general, soft inquiries do not impact your credit score or creditworthiness. However, knowing the types of inquiries lenders can make on your credit report is still important. If you see a search on your report that you don’t recognize, it could signify identity theft.
Hard vs. Soft Credit Check, What Is the Difference?
The main difference between a hard and a soft credit check is the information pulled from your credit report. A hard credit check, also known as a hard pull, is when a lender requests your full credit report from one of the three credit bureaus. This credit check is generally done when you apply for a loan or a credit card.
A soft credit check, also known as a soft pull, is when a lender only requests your credit score from one credit bureau. This credit check is generally done when you check your credit score or when a lender does a pre-approval for a loan or credit card.
Hard credit checks will always appear on your credit report, whereas soft credit checks will not. Hard credit checks can ding your credit score, whereas soft credit checks will not. So if you’re worried about a hard credit check harming your credit score, you can always do a soft credit check first to see where you stand.
How Long Do Inquiries Stay On Your Credit?
Inquiries are defined as requests for a copy of your credit report. You or companies with a legitimate business need for credit information can make inquiries. Each inquiry made is recorded on your credit report.
Inquiries stay on your credit report for two years. However, they only impact your credit score for the first year. After 12 months, inquiries fall off your credit score.
Inquiries have a small impact on your credit score. A single inquiry can drop your score by 5-10 points. However, your score can drop if you have multiple inquiries in a short period.
Multiple inquiries in a short period can negatively impact your credit score if you’re shopping for a new credit card or loan. It’s best to shop for credit products within 14 days to avoid this. This is known as a rate shopping period, and multiple inquiries within this timeframe will only count as a single inquiry on your credit report.
Will Checking My Credit Scores Result in a Hard Inquiry?
There are many myths and misconceptions about credit scores, and one of the most common is that checking your credit score will result in a hard inquiry. A hard inquiry is when a lender or creditor requests your credit report from a credit bureau to make a lending decision, which can negatively impact your credit score. However, when you check your credit score, it is not considered a hard inquiry.
How Do I Run a Soft Credit Check?
You can run a soft credit check on yourself in a few ways. One way is to use a service like Credit Karma. Credit Karma will allow you to see your credit score for free. They will also show you which factors are impacting your score.
Another way to do a soft credit check is to pull your credit report. You are entitled to one free annual credit report from each major credit bureau.
Finally, ask the business to consider extending your credit to do a soft pull on your behalf. This is sometimes called an inquiry. Inquiries will appear on your credit report but will not impact your score. If you are concerned about too many inquiries affecting your score, you can ask the business to do a soft pull instead.
Here are some statistics on soft credit checks:
|Number of soft credit checks performed each year||2.2 billion|
|Percentage of soft credit checks that result in a loan or credit card approval||20%|
|Two years||Less than 5 points|
|Length of time that a soft credit check remains on your credit report||2 years|
Can You Fail a Soft Credit Check?
A soft credit check won’t give the lender access to your credit report. Still, it will only provide a basic overview to determine if you qualify for a loan. This check won’t impact your credit score, but it’s possible to be denied a loan if there are a lot of late payments or debt in your credit report. Checking your credit report through Credit Check Total before applying for a loan can give you an idea of your chances of approval.
However, even though a soft credit check won’t impact your score, you can still succeed. If a lender sees you have much debt or late payments on your report, they may decide to keep you from giving you the loan.
So, while you can’t fail a soft credit check in the traditional sense, you can be denied a loan based on the information in your report. Suppose you’re worried about your chances of getting approved for a loan. In that case, check your credit report beforehand to be prepared.
What Are the Benefits of a Soft Credit Check?
There are several benefits of a soft credit check:
- It allows you to check your credit score without affecting it.
- It is a way to pre-qualify for loans and lines of credit.
- It can help you manage your credit by allowing you to see what lenders see when they check your credit.
A soft credit check is a great way to keep track of your credit score and ensure accuracy. It is also a way to get pre-qualified for loans and lines of credit. This can help you get the best terms and rates when you borrow money. Finally, it can help you manage your credit by allowing you to see what information lenders see when they check your credit.
Frequently Asked Questions
What distinguishes a soft credit check from a hard credit check?
Soft credit checks don’t affect your credit score while hard checks can temporarily lower it. Soft checks are visible only to you but hard checks are seen by other lenders.
How does a soft credit check impact my credit score?
Soft credit checks have no impact on your credit score since they are not visible to other lenders and are not factored into score calculations.
Can lenders perform a soft credit check without my consent?
Yes, lenders can run a soft check without permission to pre-screen you for pre-qualified offers but not for a loan application.
When do creditors typically use soft credit checks?
Creditors use soft checks to pre-qualify consumers for credit cards, personal loans, auto loans, and other financial products without affecting their scores.
Are soft credit checks visible to other lenders and creditors on my credit report?
No, soft credit checks are not visible to other lenders on your credit reports and do not get listed on your credit history. Only you can see them.