Soft Credit Checks: What They Are & When They’re Used
A soft credit check is the type of credit inquiry, or credit pull, that does not hurt your credit score. Soft credit checks happen when you check your own credit report, for example, as well as when credit card companies pre-screen you for offers. In contrast, hard credit checks can lead to credit score damage, especially when you have many in a short period of time. Hard inquiries happen whenever you apply for a new loan or line of credit.
It’s important to make sure you recognize all of the inquiries on your credit report. And you can review your latest TransUnion credit report for free on WalletHub, the only site with free daily updates.Check Your Credit Report for Free Now
Below, you can learn more about soft credit checks, including when they happen, when they’ll show up on your credit report and more.
When Soft Credit Checks Happen
When your credit gets pulled, it’s usually a soft check. In fact, the only credit decisions that will definitely require a hard credit check are when you apply for a credit card or a loan, although a few things can lead to either type.
Here are the situations that may require a harmless soft credit check:
- Checking your own credit. You can get a copy of your credit report from each major bureau, TransUnion, Equifax, and Experian, every 12 months via AnnualCreditReport.com. We suggest ordering a different one every 4 months, as they contain pretty much the same information. In addition, joining WalletHub for free lets you check your daily-updated credit report whenever you want.
- Employer background checks. With your permission and a clear need, an employer may review an abridged version of your credit report as part of its overall evaluation. For example, this is common for jobs that require working with money or a security clearance.
- Pre-screening by creditors. You’ve probably gotten offers in the mail where you’re pre-selected to apply for cards. Creditors don’t get your whole credit report until you actually apply, but they base offers on available information.
- Creditor account maintenance. Soft credit checks are also used for routinely evaluating account terms. For example, they may be used to set the spending limit on a no-preset spending limit card every month.
- Renting apartments, leasing cars & getting utilities. These groups are interested in your payment history and debts to ensure you’ll pay on time each month.
- Opening a bank account. Financial institutions will sometimes pull your credit history when you open a deposit account.
The last two items on the list are occasions that can lead to either soft or hard inquiries. You should always ask if a soft pull is possible, as you want to minimize any damage to your credit score.
Soft Credit Checks on Your Credit Report
Soft credit pulls will be listed on your full credit report, not on the summary report that some sites provide. But they won’t have any effect on your credit standing. Credit reports keep a record of who checks your credit so that you can stay informed. If you see anything you don’t recognize, check this helpful guide. Anyone who performs a hard credit check must get your permission first, so if someone has performed an unauthorized check you’ll have to dispute it with the credit bureaus and have it removed.
Soft credit pulls are a great resource that you should be taking advantage of on a regular basis. Staying up-to-date with your credit history is the best way to start improving it. In addition, WalletHub’s personalized credit analysis can help tell you what to change and how long it will take to improve.
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