Key Highlights
Here’s a quick look at what you need to know about soft credit checks:
- A soft inquiry, or soft pull, is a review of your credit report that isn’t for a new credit application.
- Unlike a hard credit check, a soft inquiry does not affect your credit score in any way.
- Common reasons for a soft inquiry include pre-approved offers, employment background checks, and you checking your own credit.
- Soft inquiries are visible on your credit report, but typically only to you.
- Lenders use them for preliminary screenings before sending out pre-approved offers.
Understanding Soft Credit Checks
Have you ever looked at your credit report and seen inquiries you don’t recognize? If they’re listed as soft inquiries, there’s no need to worry. A soft credit check is simply a review of your credit history that isn’t tied to a specific application for new credit. It’s a way for companies, or even you, to look at your credit file without causing any impact.
Unlike a hard credit check, which happens when you apply for a loan or credit card, a soft check is a more casual glance. The major credit bureaus record both types of inquiries, but they serve very different purposes and have different effects on your credit. Let’s explore what makes a soft check unique and how it differs from a hard one.
Definition and How Soft Credit Checks Work
So, what exactly is a soft inquiry? Think of it as a background check on your credit. It’s a review of your credit file that occurs for reasons other than you applying for new credit. This is why it’s often called a “soft pull” or “soft check”—it’s a gentle look that doesn’t leave a mark on your score. Companies might perform a soft check before sending you a promotional offer, or you might trigger one when you check your own credit.
The process is straightforward. A person or organization with a legally authorized reason accesses your credit report for a preliminary review. This is different from a hard inquiry, where you give a lender explicit permission to pull your entire credit file because you are actively seeking a new loan or credit card.
Because a soft inquiry isn’t linked to a new credit application, it’s not seen as a sign of financial risk. Lenders know you’re not trying to take on new debt, so it has no bearing on your creditworthiness. You can check your own credit as often as you like without any negative consequences.
Key Differences Between Soft and Hard Credit Checks
The key differences between a soft and hard credit check come down to purpose, permission, and impact. A hard inquiry happens when you apply for new credit, requires your consent, and can temporarily lower your credit score. A soft inquiry, on the other hand, is for general review purposes, may not require your direct permission, and has zero effect on your score.
When you apply for a mortgage, auto loan, or credit card, you can expect a hard credit check. Lenders need to see your full credit history to decide if they should lend you money. In contrast, a soft credit check is used for things like pre-screened offers, employment checks, or when you monitor your own credit through the credit bureaus.
To make it easier to understand, here’s a simple breakdown of a hard inquiry versus a soft inquiry:
| Feature | Hard Inquiry (Hard Pull) | Soft Inquiry (Soft Pull) |
|---|---|---|
| Impact on Credit Score | Can temporarily lower your score | Does not affect your score |
| Reason for Inquiry | Occurs when you apply for new credit (loan, card, etc.) | Occurs for background checks, pre-approved offers, or checking your own credit |
| Your Permission | Requires your explicit permission | May not require your permission |
| Visibility on Credit Report | Visible to all lenders | Typically visible only to you |
Common Reasons for Soft Credit Checks
You might be surprised by how often soft credit checks happen. They are a common tool used for various background screenings. For example, credit card companies often use them to identify potential customers for pre-approved offers. If you’ve ever received a “you’re pre-approved!” letter in the mail, a soft check was likely the first step.
Beyond marketing from a credit card issuer, these checks are also used in other areas of your life. Employment applications and rental screenings are two frequent scenarios where your credit might be reviewed this way. In the next sections, we’ll look at these reasons more closely.
Pre-approved Offers and Lender Uses
One of the most common uses of a soft inquiry is for pre-approved offers. Credit card companies and other lenders perform a soft check on your credit file to see if you meet their basic criteria for a product. If you do, they might send you a pre-screened offer. It’s their way of marketing to people who are likely to qualify.
This process helps you, too. Getting pre-qualified for a loan or credit card often involves a soft inquiry, allowing you to do some rate shopping without hurting your credit score. It gives you an idea of the terms you might receive before you formally apply. Keep in mind that if you decide to accept a pre-approved offer and apply, the lender will then perform a hard inquiry.
Lenders and other companies use soft inquiries for several reasons, including:
- Pre-screened Offers: To send you promotional offers for credit cards or loans.
- Insurance Quotes: Insurance companies may use a soft pull to help determine your premiums in most states.
- Account Reviews: Your current creditors may perform periodic soft checks to review your account and decide whether to adjust your credit limit or interest rate.
Employment and Rental Applications
Soft credit checks aren’t just for financial products; they’re also a part of employment and rental applications. When you apply for certain jobs, potential employers may request to review your credit report as part of their background screening process. This is typically done to assess your financial responsibility, especially for roles that involve handling money or sensitive information.
Similarly, when you apply to rent an apartment or house, landlords or property management companies often run a soft credit check. They use the information on your credit report to gauge whether you are likely to pay your rent on time. In both cases, this type of inquiry is considered a soft pull and won’t damage your credit score.
It’s important to know that for employment purposes, a company must get your written permission before they can pull your credit report. For rental applications, this check can sometimes be a hard pull, so it’s always a good idea to ask the landlord or leasing company beforehand to be sure.
Impact of Soft Credit Checks on Your Credit Score
The single most important thing to remember about soft credit inquiries is that they do not affect your credit score. Whether you have one soft pull or a hundred, your score won’t budge. This is a key distinction from a hard inquiry, which can cause your score to dip by a few points, especially if you apply for a new credit card or several loans in a short time.
Because they don’t lower your score, you can check your own credit score and report as frequently as you like without any penalty. This is a great way to monitor your financial health and watch for any errors or signs of fraud. Now, let’s confirm whether a soft inquiry truly has any impact and how you can spot them on your report.
Does a Soft Credit Inquiry Affect Your Score?
The answer is a clear and simple no. A soft inquiry will not lower your credit score. Credit scoring models are designed to assess the risk of you not repaying a debt. A soft inquiry is not associated with an application for new credit, so it doesn’t signal increased risk. It’s viewed as a routine part of managing a credit profile.
In contrast, a hard inquiry happens when you actively seek new credit. Multiple hard inquiries in a short period can suggest to lenders that you are in financial distress, which is why they can negatively impact your credit score. A single hard inquiry might only drop your score by a few points, but the effect can be greater with several applications.
A soft inquiry, however, is harmless. Your current lenders might use one to review your account for a potential credit limit increase, or you might trigger one by using a credit monitoring service. In either case, your credit score remains completely untouched.
Viewing Soft Credit Inquiries on Your Report
Yes, you can see soft credit inquiries listed on your credit report. When you pull your own credit file from one of the major credit bureaus like Experian, Equifax, or TransUnion, you will find a section dedicated to inquiries. This section is usually divided into two parts: hard inquiries and soft inquiries.
While you can see every soft inquiry made on your credit history, lenders and others who view your report for a lending decision cannot. This is a crucial privacy feature. The list of soft inquiries is for your eyes only, so lenders won’t see that you’ve been shopping for insurance or that another credit card company sent you a pre-approved offer.
These inquiries typically remain on your credit report for up to two years, just like hard inquiries. However, since they don’t affect your score and aren’t visible to potential lenders, their presence is purely informational for you.
What Information Is Included in a Soft Credit Check
When a soft credit check is performed, the company gets a modified version of your credit report. It includes enough personal information and credit data to give them a general overview of your credit profile. This allows them to make a preliminary assessment without seeing every single detail that would be available in a hard pull.
This snapshot helps them decide if you meet their initial criteria for an offer or a service. It’s less comprehensive than the full report a lender sees when you apply for a loan, but it provides key insights into your financial habits. Let’s look at the specific details that are reviewed during this type of inquiry.
Details Reviewed During the Inquiry
A soft inquiry provides a high-level look at your credit file. It’s not as detailed as a hard inquiry, but it still reveals important information about your financial behavior. The goal is to get a quick sense of your creditworthiness without diving into the full report.
During a soft pull, a company can typically see a summary of your credit report. This allows them to assess your reliability without you having to formally apply for anything. It’s a snapshot, not the full picture.
Here are some of the details often reviewed during a soft inquiry:
- Payment History: Your track record of paying bills on time.
- Types of Credit: A summary of your credit mix, such as credit cards, auto loans, or a mortgage.
- Credit Limits and Balances: The amount of credit you have available and how much you are currently using.
- Public Records: Information like bankruptcies or collections accounts.
Privacy Considerations and Notifications
When it comes to privacy, soft inquiries are handled differently than hard ones. For many types of soft pulls, such as pre-screened offers, a company does not need your direct permission. However, there are rules in place to protect you. For instance, an employer must get your written consent before checking your credit.
You generally will not receive notifications each time a soft inquiry occurs. This is because they happen frequently for marketing and account management purposes. The best way to stay informed is to regularly review your credit report from the major credit bureaus. This allows you to see who has been looking at your file.
Checking your report is also a great way to spot unauthorized inquiries. If you see a hard inquiry you don’t recognize, it could be a sign of identity theft. While an unfamiliar soft inquiry is usually harmless, a strange hard inquiry means someone may have tried to open an account in your name. Disputing these unauthorized inquiries with the credit bureaus is an important step in protecting your credit.
Practical Tips for Managing Credit Inquiries
While a soft check is harmless, it’s wise to be mindful of any credit inquiry on your report. The main goal is to minimize hard credit pulls, as too many can hurt your chances of credit approval. Understanding when each type of check is used can help you protect your score and manage your financial situation effectively.
Knowing the difference is key. When you’re just exploring options, aim for processes that use a soft pull. When you’re ready to commit to an application, be prepared for the hard inquiry. Here’s how you can tell which is which before you proceed.
How to Differentiate Between Soft and Hard Checks
How can you tell if a credit check will be a soft pull or a hard pull? The easiest way is to ask. Before providing your personal information, ask the company, “Will this be a hard or soft credit inquiry?” Most representatives should be able to tell you. Generally, any action that involves you formally applying for new credit will result in a hard credit pull.
Actions that are more exploratory in nature typically use a soft pull. For example, checking to see if you pre-qualify for a loan is almost always a soft inquiry. This allows you to compare rates and terms from different lenders without any impact on your credit.
Here are some general guidelines to help you differentiate:
- Soft Pull: Checking your own credit, pre-qualification offers, background checks for employment or rentals, and insurance quotes.
- Hard Pull: Formally applying for a new credit card, mortgage, personal loan, or auto loan.
- Ask First: If you’re ever unsure, always ask the lender or company which type of inquiry they will perform. This helps you avoid accidental hard pulls and protect your score.
Frequently Asked Questions
Will I be notified if a soft credit check is run on me?
Generally, you will not receive a direct notification when a soft inquiry occurs. These checks are common for marketing and account maintenance. The best way to see them is by regularly reviewing your credit report from the credit bureaus, where they are listed for your information while maintaining your privacy from lenders.
How often can companies perform soft credit checks?
There is no limit on how often companies can perform a soft inquiry. Because a soft credit check does not impact your own credit score, companies with a permissible purpose can review your file as needed for things like pre-screened offers or account reviews.
Are soft credit checks included on my credit report?
Yes, every soft credit check is listed on your credit report. You can see a full list of these inquiries when you request your report from the credit bureaus. However, this list is only visible to you and does not affect your own credit score or the lending decisions of others.