Understanding the Differences Between Hard Pull and Soft Pull Credit Reports

When it comes to credit inquiries, not all are created equal. Whether you're applying for a mortgage or just checking your credit score, understanding the difference between a hard pull and a soft pull credit report can help you manage your credit wisely. Here’s a breakdown of what sets them apart:

What is a Hard Pull Credit Report?

A hard pull, also known as a hard inquiry, occurs when a lender or financial institution checks your credit report as part of their decision-making process. This typically happens when you apply for:

• Mortgages

• Credit cards

• Auto loans

• Personal loans

Key Characteristics of a Hard Pull:

• Impact on Credit Score: Hard inquiries can slightly lower your credit score. Typically, each hard pull can reduce your score by a few points.

• Visible to Others: Hard inquiries appear on your credit report and can be seen by other lenders.

• Consent Required: Hard pulls require your explicit permission.

• Duration on Report: They remain on your credit report for up to two years, but their impact on your score lessens over time.

What is a Soft Pull Credit Report?

A soft pull, or soft inquiry, is a credit check that does not affect your credit score. These inquiries are usually done without your explicit consent and are not visible to other lenders. *OneTrust does request your consent for Soft Pull.

Common scenarios include:

• Pre-approved credit offers

• Employer background checks

• Personal credit score checks

Key Characteristics of a Soft Pull:

• No Impact on Credit Score: Soft inquiries do not affect your credit score at all.

• Not Visible to Lenders: They are only visible to you when you check your credit report, not to other lenders.

• No Consent Needed: Soft pulls can happen without your permission, like when a credit card issuer pre-approves you for an offer.

Why the Difference Matters

Understanding these differences is crucial, especially when you're planning major financial moves. Multiple hard pulls in a short period can signal to lenders that you might be a higher credit risk, potentially impacting your ability to secure the best rates and terms.

On the other hand, soft pulls are a helpful tool for monitoring your credit health without any negative consequences. Regularly checking your credit report through a soft pull can help you catch errors or signs of identity theft early.

Best Practices

• Limit Hard Pulls: Only apply for credit when necessary to minimize the number of hard inquiries on your report.

• Monitor Your Credit: Use services that allow you to check your credit score with a soft pull to stay informed about your credit status.

• Timing Matters: When rate shopping for mortgages or auto loans, multiple inquiries within a short window (typically 14-45 days) are often treated as a single hard inquiry to minimize the impact on your credit score.

By being mindful of how and when your credit is checked, you can better manage your credit score and overall financial health. Remember, knowledge is power, especially when it comes to your credit.

Feel free to reach out if you have any questions or need further information about credit inquiries or mortgage applications!

CalCon Mutual Mortgage LLC, dba OneTrust Home Loans is an Equal Housing Lender NMLS #46375; 3838 Camino del Rio N Suite 305, San Diego, CA 92108.

Corporate phone (888) 488-3807. For more licensing information visit: https://onetrusthomeloans.com/licensing-information/. All products are not available in all states. All options are not available on all programs. All programs are subject to borrower and property qualifications. Rates, terms and conditions are subject to change without notice. This is an Advertisement.