What Is A Soft Credit Check And Does It Affect Your Credit?
5-Minute ReadUPDATED: May 29, 2022
In some situations, such as applying for a new job or renting an apartment, a background check may be required to get a feel for what kind of employee or tenant you would be. As part of this process, they may also ask to view your credit history for a better sense of your reliability. This is what’s known as a soft credit check (or soft credit inquiry) – and before you start feeling nervous about what this means for you or your credit score, you should read what we have to say about what soft credit checks really are and how they work.
What Is A Soft Credit Check?
A soft credit check, also called a soft credit pull or a soft credit inquiry, occurs when you, a company or an authorized individual looks over your credit report to see how you manage your debt. Checking your own credit report is also considered a soft credit check.
A soft credit check can even occur without you being aware of it. Those prequalified credit card offers you get in the mail? Those companies did a soft credit check to prescreen your eligibility.
Other instances of a soft credit check can include renting an apartment or opening a bank account. Getting a look at how you manage your money can prove reliability and bring peace of mind to an employer, landlord or creditor.
What Does A Soft Credit Check Show?
Soft credit checks can provide the individual or company that is performing the inquiry with some of the basic information of your credit report. This report will not be as detailed as a hard inquiry, but can provide them with a good glimpse into your creditworthiness. Most of the time, the individual or company will request specific information from your credit report. This could include your payment history and any loans or debt that you have.
A soft credit check won’t reveal personal information like your birthdate, age or marital status. You can also rest easy knowing it won’t reveal any of your account numbers or your credit score, either.
Soft Vs. Hard Credit Check
As the differences in the two names suggest, a hard credit check (or hard inquiry) is the opposite of a soft credit check. The biggest difference between these two inquiries is that only a hard credit check negatively impacts your credit score.
A soft inquiry is used for background checks or for a prescreened offer. A hard inquiry, on the other hand, is used when applying for any type of loan and requires your consent to be obtained. A hard pull can initially take up to five points off your FICO® Score and would remain visible on your report for about 2 years.
In most hard credit check cases, a lender or creditor will pull your report from only one of the major credit bureaus – Equifax®, ExperianTM or TransUnion® – except in the case of a mortgage where all three are checked. A hard credit check will never take place without you knowing or granting authorization.
Do Soft Credit Checks Affect Your Credit?
There’s a reason it’s called a "soft" inquiry as opposed to a "hard" one. In the case of following through and taking out a personal loan, or applying for a mortgage or credit card, a credit check normally impacts your score. A soft credit check occurs in an instance where no money or credit is being lent out (like when browsing for potential loan offers), so the inquiry has no effect on your overall credit score. This goes for checking your credit score, too.
Can You See Soft Inquiries On Your Credit Report?
Yes, you can view any of the soft inquiries that have been pulled on your credit report. You can request a copy of your credit report once every 12 months from each of the three credit bureaus. This includes ExperianTM, Equifax® and TransUnion®. Your soft credit checks will be visible on these reports.
Can Anyone Do A Soft Credit Check?
When a credit card company runs a soft credit pull without your consent, you may wonder just who else is allowed to do this. While a hard inquiry is never allowed to be pulled without your consent, a soft credit check can be pulled without it. A soft credit check is rarely done without a good reason for doing so, though, and won’t be pulled by just anybody.
The following individuals and institutions may perform or ask permission to do a soft credit check:
- Yourself: When you check your own credit report and score, it’s considered a soft check. Checking your credit regularly is a great way to stay on top of your financial health.
- Credit card companies: As mentioned above, credit card companies may do a soft credit check on your report to see if you’re prequalified for a new card they’re offering. They’ll send you these offers with the option to sign up.
- Potential employers: Soft credit checks can be a part of a background check when applying for a job. Employers can look at any late payments or collected bill amounts and have an idea of how responsible of a person you are.
- Landlords: When renting an apartment, the landlord will want to know how likely you are to pay your rent on time. A landlord will run either a hard or soft pull, depending on the means they use to do it. Utilizing services offered by a major credit bureau will often yield a soft credit check, rather than going through a background and screening company.
- Insurance companies: Similar to credit card companies, getting a quote for homeowners, auto or other types of insurance requires at least a soft credit check.
As you can see, a soft credit check is less an invasion of privacy and more of a confirmation that you’re a creditworthy individual. With little to no risk to your hard-earned credit score, rest assured these pulls are just another step in the processes of your financial life. If you know you’ve got good credit history, relax and let them see how good at building credit you really are.
However, if you’re looking to consolidate your debt and improve your financial wellness, apply for a personal loan with Rocket LoansSM today.
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