Hard vs. Soft Credit Checks

What is a credit pull?

Soft Pull

Soft credit pulls do not require your social security number and do not require your permission. They may appear on your credit report but will not affect your score.

Soft pulls are commonly used for pre-approval credit offers. Companies run a soft credit check to determine whether you should qualify for financing or credit. If they determine your fit, they will send an offer. Somewhere on the unsolicited offer (we’ve all received them), it will likely be stated that the offer is contingent on a full underwriting of an official application – including a full credit check.

A soft pull is also what you are doing when checking your own score, whether through a banking app or a monitoring service like annualcreditreport.com.

One thing to understand about a soft credit pull is that it is normal for this score to differ from a more official “hard pull.” Soft pulls do not account for important criteria like the type of financing applied for (i.e. a mortgage inquiry looks at slightly different criteria than a credit card inquiry). So, while regularly monitoring your credit is undoubtedly a good practice, you should understand that you can only get a general idea from any monitoring service.

Common types of soft credit inquiries:

• Pre-approval offers
• Background checks
• Credit monitoring services
• Insurance quotes

Hard credit pulls require your social security number and should never occur without your knowledge and consent.

A hard pull most often occurs when applying for a loan or credit. Lenders or creditors submit an official request for credit history and will usually report to the credit bureau that the request was made. There isn’t a standard number for how much a hard credit pull will affect your score, but FICO generalizes that one new inquiry should not lower a score by more than five points. Regardless of exactly how many points you have, your score should naturally recover over time from a single inquiry. Generally, financial experts advise against having multiple credit pulls in a short period of time, unless what you’re applying for allows it.

Common types of hard credit inquiries:

• Mortgage applications
• Car loan applications
• Personal loan applications
• Credit card applications

Certain industries – like the mortgage industry – allow time for multiple hard inquiries. This is referred to as the ‘shopping window.’ It is in place to protect and empower you – the consumer – to get multiple estimates without taking multiple negative hits on your credit. This window opens as soon as the first hard inquiry occurs and remains open for 14-45 days – depending on the credit bureaus.

Something to understand here is that any window exists for a particular type of inquiry. This means that if you apply for a mortgage loan, the window opens for multiple mortgage-related inquiries only. If you apply for a car or credit card loan within that time, neither will be covered by the mortgage shopping window. Therefore, it is a good practice to identify exactly what you want before applying for credit or financing. If you decide on multiple things, pursue them individually – it will help your score and make for a smoother application process.