There are two kinds of credit inquiries, soft and hard. Soft credit pulls, also called a soft credit check or soft inquiry, occurs when you or an authorized party (i.e., prospective employer) pulls your credit report.
They may also happen when mortgage lenders, credit card issuers, or alternative financing companies pull your report to preapprove you for funding.
Soft credit pulls don’t impact your credit score, in fact, you could have hundreds of soft inquiries, and your credit report won’t be affected.
How Do Soft Inquiries Impact Credit Scores?
When you apply for business funding, banks or financing companies will typically make a soft inquiry to overview the basics of your credit history. This may include how often you’ve applied for credit and whether you make your payments on time.
Soft inquiries do not affect your credit score directly; though, they can be viewed on your reports by lenders or yourself.
Why Are Soft Inquiries Made?
Creditors and funding companies may want to see if you or your business are managing your credit history and debt properly. Soft pulls can tell them how well you manage your credit accounts. Late payments and credit usage, such as how much you took out on loan or borrowed on your credit card, are some of the information funding companies will likely want to analyze.
When you apply for a credit card or a loan, the card issuer or lender will usually perform a hard pull so they can see your credit history. Your score will typically drop five to eight points depending on the type of credit and other factors. A hard inquiry’s score impact is usually minimal and temporary but can stay on your report for two years.
Conversely, a soft credit pull can happen when somebody looks at your credit report, but you didn’t submit a credit or funding application. Soft pulls aren’t typically a barometer of higher credit risk and, therefore, don’t affect your scores. A soft inquiry can happen when:
- You check your own credit report.
- You apply for preapproval for a mortgage or loan.
- A business or credit card company checks your credit history to determine if you are eligible for a preapproval offer.
- A current creditor or financial institution runs your credit.
- You give a potential employer permission to check your credit.
There are specific financial applications that require either a soft or hard inquiry, including house or apartment rentals and opening a bank account. You can ask the management company or bank which type of inquiry they will be using in these instances.
Can I See Soft Inquiries on My Credit Report?
By law, credit bureaus are required to let you know each time somebody does a credit check whether they pull a credit score, credit report, or both. Look for these inquiry types in their own section under a heading like “inquiries that do not affect your credit” or “soft inquiries.” It will include information like the company’s name and the date they accessed the report.
Keep in mind that each of your three credit reports will likely have different inquiries. That’s because a credit check is only added to the report that was pulled. For example, if you want to check your credit history but only do a soft pull on your TransUnion report, that soft inquiry won’t show up on your Experian or Equifax reports.
Ways to See How Soft Credit Pulls Are Affecting Your Score
You can use a soft credit pull to better understand how your credit activity is reported to the different bureaus. You can also find out which companies are considering extending your credit. There are a few ways you can view a soft credit inquiry, including:
- Credit Bureaus — The Fair Credit Reporting Act (FCRA) dictates how reporting agencies can share and collect your financial data. Legally, you can request a free copy of your personal credit report from each of the three bureaus once every 12 months.
- Government-authorized site — AnnualCreditReport.com is a government-approved site where you can get a copy of your report.
- Your business card company — You can also check your score by doing a free credit score assessment provided by your credit card company. Nearly every business card company gives a free score assessment to their clients. These credit inquiries are soft pulls and will provide you with credit profile and score details every month.
Does Revenued Perform a Soft or Hard Pull?
When you apply for the Revenued Business Card, our underwriters perform a soft pull on your credit report to check your eligibility. Since the Revenued Card is not a credit card, it does not report to the various bureaus, including FICO.
We do a soft pull to check for things like your payment history and to ensure there are no merchant cash advance (MCA) defaults on your report. Like any soft inquiry, Revenued Soft Pulls have no bearing on your credit score. To find out more about the Revenued Business Card, call +1 (877) 662-3489 or join our online mailing list to be first in line for product updates and releases.
We're working on some pretty cool new pieces of content, including tools that will give you insight into your business finances.
Want to be the first to know when they launch?