Does A Soft Inquiry Affect Credit Score?

Whenever you apply for a new loan or credit card, the company performing the credit check will evaluate your creditworthiness. This sort of credit check is referred to as a hard inquiry. While hard inquiries do little harm to your credit score and can be present in your credit file for up to 2 years. They inform other lenders that you are on the lookout for more credit.

However, other types of credit checks are known as soft credit inquiries or soft pulls. Soft inquiries are credit checks that are friendly and do not drop your rating or make them visible to other lenders. In this article, we will explore what a soft credit check entails, the occasions that it happens, and how you can detect such inquiries in your credit reports.

What does a soft credit check mean?

A soft credit check is a situation where one’s credit report or score is accessed without affecting the credit rating or leaving a record on the report. Soft inquiries are usually made by a lending company or a creditor who wants to verify your identity or to know the pre-approved credit limit being offered to you. Since no other party can see them, they help companies assess your suitability for new products and services without hurting your credit score or signaling risk to other future lenders through the hard inquiry method.

Soft Inquiry Warnings: What They Are and Why They Matter

Here are the most general reasons why you can have soft inquiries from specific companies:

1. Pre-Qualification Offers Different credit institutions like credit card companies, banks, or financing firms will refer to this report to determine your eligibility for some of the loans or credit lines. It is excellent for getting pre-qualified offers without having to record hard inquiries. Possessing these may then necessitate a hard pull to accept the pre-approved products.
2. Account Review Inquiries Your existing creditors may periodically pull PART of your credit data to determine your eligibility for credit limit increases or rate reductions. They may also verify your information when assessing your payment transactions over the period with them on accounts.
3. Identity Verification Purposes Soft checks can easily be done by government agencies or service providers like cell phone companies, during application processes. Unlike other requests for verification, these do not impact your credit score.
4. Tenant Screening Processes Sometimes, prospective landlords assess the applicant’s creditworthiness as a way of predicting their ability to make timely payments for the rent. In this case, they are legally required to tell you that they may perform such checks to make decisions about tenancy.

How Long Do Soft Checks Remain On Your Credit Report?

It is, however, important to note that soft inquiries do not appear on the credit report as they do not harm the credit score as hard inquiries do. They tend to be hidden from you alone and do not appear on your credit report with the consumer reporting agencies. Depending on the CRAs, soft inquiries may appear on your credit report from 6 months to 2 years.

While these checks are recorded only for a short period, they do not affect your chances of eligibility for loans or your credit score computation. Two exceptions are soft inquiries done for pre-screening purposes and for credit monitoring purposes, which may be reported for longer periods but do not impact your rating.

How to Verify Soft Inquiries on Your Credit Report

It is the law that any consumer reporting agency must furnish you with one file of your credit report annually to ensure that all entries are accurate and include everything. There are some ways to get free credit reports as follows;

AnnualCreditReport.com Thus the applicant directly contacted Equifax, Experian, and Transunion. Any free reports or trial credit monitoring services provided for consumers by consumer reporting agencies

When you gain access to your latest credit reports, find the section labeled “Inquiries Made About You”. This section encompasses all checks and balances most often referred to as hard and soft checks by different financial institutions. Soft inquiries are usually further divided from hard inquiries but it may not always mention ‘soft inquiry’. Any credit checks that do not indicate that they are hard inquiries are usually considered to be soft inquiries.

In case you find soft checks that you never transacted with or never approved any company to check your credit score, you can ask for more details of these soft inquiries. However, it is generally safe to assume that, like most non-hard credit inquiries, these will only be visible to you and will not impact credit scores.

In Summary: Soft credit checks enable creditors and providers to access and scrutinize your credit history without harming your credit score or chances of obtaining credit. These soft checks are usually done for pre-approved offers, account review, verification, or tenancy purposes. Soft inquiries as mentioned earlier may show on your credit report for 6 months to 2 years and do not affect your score at all. However, frequent soft checks over a short period can suggest that you are on the lookout for more credit.

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