Credit Pulls: What They Are, Who Can Do Them & More
“Credit pulls” are the same thing as “credit inquiries” and “credit checks.” All of these terms refer to the act of checking a credit report. You can pull your own credit report, for example. As can a lender, employer, landlord or insurance company, under the right circumstances.
Pulling your own credit report will not hurt your credit standing in any way. In fact, self-credit pulls could help improve your score if you notice opportunities for improvement or errors that you can dispute. And you can check your latest TransUnion credit report for free on WalletHub, the only site with free daily updates.Check Your Latest Credit Report – 100% Free
Not all credit pulls are created equal, however. There’s a difference between so-called soft credit pulls and hard credit pulls, for one thing. And for your credit score’s sake, it’s important that you understand the difference. You can find everything you need to know about credit pulls below.
Who Can Pull Your Credit Report?
Besides you, there are a number of individuals and groups that can pull your credit report to evaluate how risky it is to do business with you. They include:
- Lenders – Anytime you apply for a credit card or loan, the financial institution issuing it will do a hard credit pull. They need to review your credit history to determine whether you’re a good candidate to borrow. Most credit card companies will also do a hard pull if you request a higher credit limit.
- Landlords – Renting an apartment counts as borrowing in the sense that you’re receiving a service – a place to live – in advance of paying your monthly rent. And given that it’s often very difficult to evict tenants once they’re in, landlords typically want to make sure applicants are responsible borrowers.
- Auto Financing & Insurance Companies – Better credit means higher approval odds and lower interest rates. According to WalletHub research, people with fair credit can expect to pay over $6,000 more in interest on a 5-year car loan than folks with excellent credit, And people with no credit pay about 65% more in car insurance premiums than drivers with excellent credit.
- Utility companies – We generally pay for household utilities – electricity, water, gas, etc. – after we use them. So it makes sense that the companies providing these services are interested in our experience borrowing.
- Phone service – Much like in the case of utilities, you consume phone service before being charged at the end of the month.
- Employers – Your employer can’t see your full credit report, but if you give them permission they can get an abridged version from the credit bureaus. They use this as part of background checks, and it can serve as a sort of additional character reference.
It may feel a bit daunting to know that all these different groups could access your credit information. But it’s important to understand that their pulls will only affect your credit standing in certain situations. Below, we’ll explain when that can happen.
Hard vs. Soft Credit Pulls
|Category||Hard Credit Pulls||Soft Credit Pulls|
|Credit Impact||Can temporarily lower your score
Many inquiries in a short timeframe increase the damage.
|Happens When…||You apply for a credit card of loan
You request an increase to your credit limit
|You check your own credit report or score
Employer runs a background check
Credit companies pre-screen you for offers
Creditors perform basic account maintenance
|Legitimate Reason Needed?||Yes||Yes|
Because hard pulls have the ability to affect your credit standing, you need to give explicit permission for anyone to make a hard credit pull. Actions sometimes count, though. By applying for a credit card, for instance, you’re giving the issuer permission to confirm you meet the card’s approval requirements. And that requires a hard credit pull. But no one can just do a hard pull without your knowledge. If you see an unauthorized inquiry bringing down your score, you can dispute it.
Soft pulls don’t require permission, but the puller needs to have a legitimate reason. For example, lenders generally use soft pulls to pre-approve people for credit card offers. So no need to worry about random strangers snooping around your private info.
For more information, we suggest reading WalletHub’s article on soft vs. hard credit inquiries.
What Do Credit Pulls Show?
The type of credit report that a credit pull reveals depends on the situation. Lenders will get your full credit report, as can you from certain free credit report websites. This includes AnnualCreditReport.com and WalletHub. Other free credit report sites only provide summaries, unfortunately. Employers will also see a basic version of your credit report, if you apply for a job that requires financial responsibility or a security clearance.
Your credit report itself shows a lot of information, including: 1) Personal Information; 2) Credit History; 3) Credit Inquiries; and 4) Public Records.
Credit Pulls Databases: Not An Effective Tool
So-called “credit pulls databases” compile anecdotes from consumers about which credit bureaus certain lenders pull from, what credit score you need to get approved for certain credit cards, and what credit limits those cards provide. They are not effective or reliable because the reports are not verified or vetted in any way. And there aren’t enough of them for an accurate sample. What may be the case for one person may be completely different for another similar applicant.
Although credit pulls databases are a bust, you can learn all you need to know from WalletHub’s free personalized credit analysis. We’ll tell you how to improve your credit, how long it will take and which credit cards offer the highest approval odds.
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