The Difference Between Soft Pull vs Hard Pull Credit Checks

Exploring how soft or hard credit inquiries impact your credit is useful in understanding the basics of credit reporting. Here’s what you should know.

Difference Between Soft Pull vs Hard Pull Credit Checks

Credit bureaus keep detailed records of most everything that happens with your credit accounts, including when businesses check your credit. By law, you’re allowed to see a list of all the businesses that have reviewed your credit files. Credit bureaus keep a record of all your credit inquiries from the past two years in a section of your credit report labeled Inquiries. The credit inquiries section will list each business that has pulled your credit report and the date of the credit pull.

Soft and Hard Credit Pulls

Not all credit pulls are the same. They’re divided by whether you initiated the credit pull or not. Soft credit pulls are made when businesses check your credit report for promotional purposes, even though you haven’t applied for anything with them. Your own credit checks made when you use an app or other consumer-based credit report or scoring tool are also considered soft pulls Hard pulls, on the other hand, are made when businesses check your credit report after as a result of your own credit applications. The biggest difference between soft and hard credit pulls is whether you made an application or not.

Credit pulls affect your credit score and whether your new credit applications are approved, so it’s to your benefit that some credit pulls are treated differently.

Creditors Soft and Hard Credit Pulls

Who Can Check Your Credit?

Businesses can’t just pull your credit report because they’re curious about your credit. Federal law dictates that only businesses that have a permissible purpose can pull your credit report.

● Creditors and lenders can pull your credit report to approve an application you’ve made, to pre-approve you for credit and loan products, or in the process of reviewing your current credit terms.
● Debt collectors can pull your credit report to gather information for collecting your debt. For example, they may pull your credit report to get your most recent address information.
● Employers can pull your credit report in reviewing your employment application.
● Utility companies and cell phone service providers may pull your credit report to determine whether you should pay a security deposit to establish services or to finance products related to your service.
● Insurance companies pull your credit report to pre-approve you for services or to give you an insurance quote.

If a business asks for your social security number in the process of approving your application, there’s a good chance it’s going to pull your credit. A record of that credit pull will be added to your credit report and you’ll be able to see it the next time you review your credit report.

What Does a Soft Pull Credit Report Look Like?

The basic credit report that a business sees is the same whether there’s a soft or hard credit pull. You don’t have to give your permission for a soft pull on your credit report, but business still need to have a legitimate reason to check your credit report to perform a soft pull. Soft pulls show up only on your version of your credit report. When other businesses check your credit to approve your applications, they won’t see the soft pulls. Therefore, soft pulls don’t count against you. They shouldn’t since they don’t indicate that you’ve been applying for credit. Soft pulls also are not included in your calculating your credit score.

When businesses do a soft pull on your credit report, they’re looking to prescreen you for credit cards, loans, or other credit-based services. Even though you can be pre-approved based on a soft credit pull, your application can ultimately be denied once the creditor does a hard pull and a more thorough look at your credit report, debt, and income information.

What Are Hard Pulls?

Hard pulls – the ones that result from your own credit applications – appear on all versions of your credit report. Businesses can’t perform a hard pull on your credit report without your permission. By making an application for credit (or credit-related products or services), you’re giving the business permission to pull your credit report. In the case of credit pulls for employment purposes, the creditor must get your written permission to pull your credit report. Prospective employers can only check your credit report; they can’t view your credit score for employment purposes.

When businesses check your credit, they’ll see a list of all the inquiries resulting from your applications from the past two years. These hard pulls can count against you if you’ve made several applications in a short period of time.
3 Credit Bureaus
Which Credit Report Do Credit Pulls Appear On?

You have credit reports with each of the major credit bureaus Equifax, Experian, and TransUnion. When businesses pull your credit information, they may check with one, two, or all three of the major credit bureaus. The credit pull shows only on the credit report that was pulled. For example, if a creditor pulls your Equifax credit report, they only view your Equifax credit information and a record of the pull only goes on that credit report. Your Experian and TransUnion credit reports won’t have a record of companies who’ve only pulled your Equifax credit report. If you happen to check all three of your credit reports at once, you may see inquiries on one creidt report that don’t show on the others.

How Hard Credit Pulls Affect Your Credit Score

Hard credit pulls made in the past 12 month are the only ones that affect your credit score.These inquiries make up 10% of your credit score and can lower your credit score if you’ve made multiple recent credit applications. The exact number of points you lose from a hard inquiry can vary depending on the other information on your credit report.

Credit pulls only make up a small part of your credit score compared to other information. Payment history, for example, is 35% of your credit score. Having only one or two hard inquiries on your credit report won’t damage your credit score significantly, especially if you have other positive information on your credit report. However, several hard inquiries in a short period of time Hard inquiries can also affect your credit card and loan pricing since interest rates are often baesd on your credit score. Fortunately, as the inquiries get older, they’ll affect your credit score less and less.

If you have an application denied because of too many inquiries, you’ll receive a letter in the mail within 7 to 10 days of your application with an explanation. Creditors view multiple inquiries unfavorably because they indicate you could be taking on more credit than you can handle or you could be applying for credit out of desperation to clear up financial troubles. Since having multiple inquiries makes you look like a high risk borrower, you should avoid making too many inquiries in a short period of time. can make a noticeable difference in your credit score and can lead to an application being denied.

You can wait a few months for some of the inquiries to drop off your credit report then reapply for credit. This could improve your chances of being approved provided you have sufficient income and there is no other risky information on your credit report. You can avoid hard inquiries by avoiding new credit-related applications.

Credit pull mortgage rate shopping

Should You Be Worried About Rate Shopping?

When you’re applying for a major loan like a auto or mortgage loan, shopping around for the best interest rate is key to ensuring you get a loan with the best terms. However, this typically means making mulitple applications with various lender. Mutiple loan applications can result in multiple inquiries in a short period of time, even if you go through a car dealership or a mortgage broker.

Fortunately, the credit scoring calculations recognize that multiple inquiries are the result of rate shopping and are lenient when it comes to mulitple mortgage and auto loan inquiries. The inquiries won’t count against you as long as you keep your loan shopping within a 14- to 45-day window. The exact window depends on the credit scoring model a lender uses, but sticking to a shorter timeframe for loan shopping is better to minimize the impact to your credit score.

Before you start loan shopping, make sure your credit is in the best shape possible, gather all the necessary documents for processing your application, and identify lenders you want to apply with. This will help you keep your loan shopping to the shortest time period possible.

Reviewing Credit Pulls On Your Credit Report

When you review your credit report, make sure you check the Inquiries section to review the credit pulls that have been performed. If there are credit pulls you didn’t make that are affecting your credit score, you should dispute them with the credit bureau to have them removed from your credit report. You can get a free copy of your credit report from

Unauthorized credit pulls could also be a sign of attempted credit card fraud or identity theft. Review the rest of your credit report to be sure no accounts have been fraudulently opened in your name. If you suspect your personal information has been compromised, you can add a fraud alert to your credit report to warn businesses attempting to pull your credit that they should take additional steps to confirm your identity. This prevent future frauudent accounts from being opened until the fraud alert expires in 90 days.