A soft inquiry, often called a soft pull, is a type of credit check that occurs when your credit report is accessed without you actively applying for new credit. It is commonly used by lenders, companies, or even yourself to review your credit information without negatively impacting your credit score. According to the Consumer Financial Protection Bureau, soft inquiries typically occur during activities like employment background checks, pre-approved credit offers, or when monitoring your own credit.

Understanding Credit Inquiries: Soft vs. Hard

Credit inquiries are evaluations of your credit report by either lenders or other authorized parties. They fall into two categories:

  • Hard Inquiries: Triggered by your application for new credit (e.g., mortgage, credit card, personal loan). These inquiries are visible to other creditors and can lower your credit score by a few points if you have multiple in a short time.
  • Soft Inquiries: Occur for informational or non-lending purposes, such as pre-approval offers, employer background checks, or consumer-initiated credit checks. Soft inquiries are visible only to you and do not affect your credit score.

Common Situations Involving Soft Inquiries

Soft inquiries happen in everyday financial and personal situations including:

  • Pre-Approval Offers: Credit card companies and lenders often use soft inquiries to decide if you qualify for pre-approved offers. These offers are based on an initial review of your credit file, not a full application.
  • Self-Checks: When you check your own credit score or report through services or your bank’s app, it generates a soft inquiry.
  • Employment Screening: Some employers check the credit reports of applicants as part of their hiring process.
  • Account Reviews: Current creditors may periodically perform soft inquiries to monitor your creditworthiness and manage existing accounts.
  • Identity Verification: Companies might use soft inquiries to verify identity in non-lending contexts.

Why Soft Inquiries Do Not Affect Your Credit Score

Soft inquiries do not reduce your credit score because they are not tied to a new credit application that could increase your debt risk. Instead, they help lenders or businesses gather information without influencing the risk assessment that credit scoring models perform.

Visibility of Soft Inquiries on Credit Reports

While soft inquiries are visible on your credit report, they are marked distinctly from hard inquiries and are not shared with other lenders. You can view your soft inquiries by obtaining your credit report directly from the credit bureaus or through a service that provides credit report details.

Managing Credit Inquiries Wisely

To maintain a healthy credit profile:

  • Use credit monitoring services that rely on soft inquiries to track your credit without impacting your score. Learn more about credit monitoring.
  • Limit hard credit applications to necessary occasions to prevent unnecessary score reductions.
  • When seeking loans like mortgages, consolidate your applications within a short window (usually 14-45 days) to minimize the impact of multiple hard inquiries, as credit scoring models often count multiple inquiries for the same loan type as one.

Common Misunderstandings

  • All credit checks hurt your credit? No. Only hard inquiries from new credit applications affect your credit score. Soft inquiries do not.
  • Pre-approval means credit guarantee? Pre-approval results from soft inquiries and is not a final credit approval, which requires a hard inquiry.
  • Checking credit yourself lowers your score? Checking your own credit triggers a soft inquiry and does not reduce your credit score.

For more detailed insights, explore related topics like pre-approval and credit scores.

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