A soft credit check, also known as a soft inquiry or soft pull, is a type of credit inquiry that does not impact your hard credit scores. When a lender or other entity performs a soft credit check, they usually look at your credit report for informational purposes rather than assessing your creditworthiness for a specific loan or credit application.
Soft credit checks are often done for background checks, pre-approved credit card offers, employment verification, and by individuals checking their credit reports.
What is the difference between a hard and a soft credit check?
A hard credit check and a soft credit check are two types of inquiries that can be made into your credit report, each serving different purposes and having distinct impacts on your credit score.
Hard Credit Check:
Purpose: Hard credit checks are typically conducted when you apply for traditional credit, such as a mortgage, auto loan, credit card, or other forms of financing. They are also performed when seeking approval for a new rental agreement or specific employment opportunities.
Impact on Credit Score: Hard inquiries can harm your credit score, albeit usually slightly. They may indicate to lenders that you're actively seeking credit, and too many hard inquiries within a short period might be seen as a sign of financial distress or a high risk borrower.
Soft Credit Check:
Purpose: Soft credit checks are often done for background checks or pre-approved credit offers. They may also be performed when you check your credit score. Soft inquiries do not require your explicit permission and are used for informational purposes rather than for making lending decisions.
Impact on Credit Score: Soft inquiries do not affect your hard credit scores. They are only visible to you and do not indicate an active search for credit. This makes them different from hard inquiries, which are included in your credit report and can be seen by other creditors.
How does a soft credit check impact your credit score?
A soft credit check, also known as a soft inquiry or soft pull, occurs when someone checks your credit report for reasons that do not involve a new line of credit. Direct payday and alternative lenders use sophisticated databases to establish eligibility for their lending products. You typically do not initiate some questions and can happen without your knowledge. Examples include:
- Pre-approved credit card offers.
- Background checks by potential employers. statements
- Reviews of your credit score.
Benefits of Soft Credit Check Payday Loans?
Soft credit check loans may have lower rates and fees, which help you save money and avoid defaulting on loans. Those who cannot apply for traditional bank loans due to their credit scores can apply for soft credit check online payday loans. These loans are fee based and the fees are determined by state laws, which vary by state.
These loans have many benefits for borrowers, which include:
Easy to Apply and Processed Fast
Applying for online payday loans is easy and secure. You must complete the online loan application by completing all the required details. You will be informed about your loan approval status within 90 seconds or less at CashinaSnap.com. Once approved, you will receive your funds in your account the next business day. Unlike traditional bank loans, you do not need to wait days or weeks for your loan to be processed.
Your Credit Score Will Not Be Affected
A traditional lender requires a full copy of your credit report to run a hard credit check. They may record the complicated statements on your account, which can temporarily lower your credit scores. On the other hand, a soft credit check would not affect your hard credit scores, as they are not recorded. Soft credit checks require less information than hard ones, and your lender would not rely on your credit score to process your loan application.
A Bad Credit Score is Not a Constraint
Borrowers with bad credit scores cannot apply for traditional bank loans but can apply for soft credit check loans, as a bad credit score does not affect eligibility.
Your Repayment Ability Is Checked
When you take a loan, you have to repay it on time. Otherwise, you can be charged additional fees, and your loan could be turned over to a debt collector who will contact you for payments. Also, defaulting on loans can affect your credit scores. However, soft credit check lenders try to only lend money to someone who can pay back the amount on time. They check your repayment ability. These loans are considered safe for borrowers.
Help in Improving Your Credit Score
Some soft credit check loan lenders will submit your payment details to the credit bureaus if you make your payments on time. This can improve your hard credit scores.