Young loan applicant on laptop reviewing documents. Concept: hard pull vs soft pull
Cedric Jackson
By: cjackson
Read in 9 minutes

Credit Check: Hard Pull vs Soft Pull

Applying for credit can be a complex process, especially when considering the consequences of hard pull vs soft pull. These terms can confuse many entrepreneurs applying for credit. Often, small business owners are unsure of the differences between hard pull and soft pull. 

At Camino Financial, we live by our motto: “No business left behind”. That’s why we utilize a soft inquiry or soft pull when working with our clients, an only a hard pull in very exceptional cases (in between 5 and 10% of our loans). We do this in an effort to make our business loans more accessible to those who otherwise would be rejected by traditional banks. When you submit your loan application to know if you qualify for a loan, we apply a non-exhaustive check of your credit or soft pull. Then, once you have been pre-approved and want to move on with the loan process, we review your bank statements, but that doesn’t mean we use a hard pull. By reviewing your bank statements in a totally secure and confidential way, we can make sure to offer you the best loan option, with favorable payments, interest, and term, and that better fits your finances. 

In this article, we will explain the differences between hard pull vs soft pull. Outlining the consequences of both a hard inquiry and soft inquiry helps make the whole credit application process clearer. Understanding hard pull vs soft pull is key to knowing how each can affect your credit. It is also important in helping you manage and improve your credit score over time.

What Is a Credit Check?

A credit check is a check on your credit history that potential lenders request whenever you apply for credit. This lets lenders evaluate your trustworthiness as a borrower by seeing how well you repaid past loans, your current debt status, and if you make payments on time. This data is known collectively as your credit history.

How well you have handled your finances in the past with other lenders raises or lowers what is known as your credit score. Checking your credit is also known as pulling your credit, which is further broken into the categories of hard pull and soft pull. The Fair Credit Reporting Act has a number of stipulations about when potential lenders can pull your credit. This benefits consumers because it protects their credit scores from being unnecessarily lowered. It also benefits lenders, because it helps them know exactly when and why they can perform hard inquiries and soft inquiries.

What Is a Hard Pull?

Understanding hard pulls is vital when applying for credit because they can affect your credit score. Your permission is required before any hard pulls can be performed. Whenever you actually apply for credit, a hard inquiry is performed by the potential lender. This includes applications for mortgages, business loans, credit cards, student loans, car loans, and personal loans. A hard inquiry becomes part of your credit record, so future lenders can also see it was done. A high number of hard pulls can negatively impact your credit score, so you should avoid hard pulls when possible.

Nevertheless, a hard pull is a necessary step in applying for credit. One key aspect to remember is that hard inquiries made during a 45-day period are counted as a single pull. That means that you should try to plan hard pulls around the same time to avoid unnecessarily affecting your credit score. Also, keep in mind that you should consider your current credit score before any hard pulls. If your credit score is healthy, the few points you lose from a hard pull can be spared. If your credit score is borderline low or needs serious improvement, think twice before requesting a hard inquiry.

What Is a Soft Pull?

Unlike hard pulls, soft pulls do not impact your credit score at all. In fact, soft inquiries are being made into your credit all the time. Whenever you receive a credit card offer or another loan pre-approval, it is almost certain that that company performed a soft inquiry on your credit. This lets potential lenders check whether you would even qualify for a loan before they offer it. Soft pulls are often beneficial for both creditors and applicants because they help lenders find borrowers who match their target profiles.

Employers also sometimes perform soft pulls when hiring new employees. Many times, employers see a healthy credit score as an indication that a potential employee is responsible. Mortgage lenders, auto lenders, and other potential creditors often perform soft inquiries to find potential customers. Soft pulls help them avoid offering their products and services to individuals who do not qualify in the first place. Soft inquiries also cut down on junk mail. Without soft pulls, people would be spammed with constant credit offerings without knowing whether they could even qualify.

Additionally, checking your own credit score to monitor its status is also considered a soft inquiry. The three major credit reporting agencies (Experian, Equifax, and Dun & Bradstreet) offer once annual credit score checkups. Various other companies and organizations also offer free soft pulls on your credit at your request. One such organization is Credit Karma. Credit Karma is an excellent free tool that lets you stay on top of your credit score. There is no limit to the number of soft pulls you can perform too.

When you submit your loan application, Camino performs a soft pull of your credit that doesn’t affect your credit score.

Hard Pull vs. Soft Pull at Camino Financial

Here at Camino Financial, our proud motto is, “No business left behind.” We never stop working to give our clients the very best. We have a proven track record helping entrepreneurs just like you build the businesses of their dreams. Our mission is to give every small business access to capital, as well as the tools and resources it needs to thrive. We help businesses like yours exceed their goals every day. In fact, our customers are thrilled to come back to work with us again and again.

If you are considering financing options for your business, you can submit an application with us without affecting your credit score, since we carry out a soft pull of your credit that won’t affect your credit score. Our online pre-approval form provides you with a quote of your potential loan and lets you know if you are pre-approved. Our pre-approval form is just that: a pre-approval, meaning there is no loan given and no obligation to request one. Simply answer a few questions about yourself and your business. In mere minutes, you will know whether you qualify for one of our programs and a loan quote (how much you could expect to borrow). If you like what you see and want to continue the process, one of our bilingual loan specialists will reach out to offer their assistance. Once you are approved, we’ll make sure to match you with the best financing solution that fits your needs. You could have your funds in as little as two days! Request a quote now to see how bright your business’s future can be by partnering with Camino Financial.


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