What Is a Soft Credit Check?

Key Takeaways

• A soft credit check is a less detailed inquiry often used for non-financial purposes, such as employment or insurance applications, and does not affect your credit score.
• Simple Fast Loans utilizes both hard and soft credit checks in their lending process, with pre-approved offers potentially resulting from soft checks, while the loan application process involves a hard credit check.

What Is a Soft Credit Check?

A soft credit check, also called a soft inquiry or soft pull, is a less detailed review of your credit report that doesn't affect your credit score. Soft inquiries are often used for background checks, pre-approved offers, and situations where a complete credit assessment is not necessary. They can occur without your explicit consent.

Do Soft Credit Checks Impact Your Credit Score?

No, in fact, soft credit checks serve a more diverse purpose than hard credit checks. In some cases, they do get used to helping creditors make financial decisions, but they also occur for other life events. 

Soft credit checks usually occur for the following reasons:

• Employment applications. Some employers want to know if an applicant is financially irresponsible, leading to fraud or theft. Some companies require CEO or finance job applicants to undergo credit checks for similar reasons.

Sometimes, employers want to know how reliable and organized you are and use your credit history to check those traits. In addition, soft credit checks can help the employer determine if you can stick to an agreement. 

• Insurance applications. Studies show that individuals with higher credit scores are less likely to file insurance claims. Therefore, insurance companies like to get a picture of the possibility of future claims.
  
  
• Personal credit checks. You can check your credit or receive credit updates from lending institutions periodically without impacting your credit score.
  
  
• Pre-approval offers from creditors. Some lenders, including Simple Fast Loans, offer pre-approved lines of credit to customers after a soft credit check. However, they usually require a hard inquiry to occur before issuing any credit.
  
  
• Creditor account reviews. Credits can periodically check their customers’ accounts with soft checks to review any discrepancies, updates, or progress without impacting a credit score.

Why Soft Credit Checks Matter

In short, soft credit checks let different places find out more about an applicant without hurting their credit. In addition, they help protect the institution from unreliable applicants.

Who Uses Soft Credit Checks?

Many institutions utilize soft credit checks, including the following:

• Employers
• Banks
• Credit Unions
• Auto insurance providers
• Home insurance providers
• Landlords
• Mortgage lenders (for pre-qualifying offers)
• Yourself

The Pros and Cons of Soft Credit Checks

Here are the upsides and downsides to this very common credit check.

Pros of Soft Credit Checks

Several benefits of soft credit checks contribute to their popularity, including:

• Soft credit checks don’t impact the applicant's credit scores.
• Soft credit checks give lenders, employers, and insurance companies a snapshot of credit history.
• Applicants can see soft credit check history for up to 24 months on their credit report, but lenders cannot see it at all.

Cons of Soft Credit Checks

However, there are some downsides to soft credit checks:

• Soft credit checks do not guarantee credit issuance to potential applicants.
• Soft credit checks do not appear on reports for lenders, meaning lenders won’t know if someone is considering taking out multiple lines of credit from various lenders.

How Does Simple Fast Loans Use Credit Checks?

Do you need a personal loan with a soft credit check?

Does Simple Fast Loans check credit? Yes, we use both hard and soft credit checks in our lending process. Our customers occasionally receive pre-approved offers for lines of credit generated after a soft credit inquiry. However, in most cases, we use hard credit checks during our loan process.

Do you need a personal loan with a soft credit check? Simple Fast Loans offers personal loans for our customers, and a hard credit check will occur during the application process. Therefore, you can expect the process to go something like this:

• First, you decide to apply for a loan.

• You gather the important verification documents, including a government-issued ID, social security number, phone number, income information, and banking information. We will take great care to protect your personal information.

• Simple Fast Loans offers our personal loans entirely online. Online loans give you the flexibility to apply from your home using a smartphone or laptop. You can apply at SimpleFastLoans.com in as little as ten minutes.

Note that your application will have information regarding using your credit report. We will only run a credit check if you finish your application and have authorized the credit check.

• We receive your application within minutes of its submission. After receipt, we run a hard credit check using your provided social security number and personal information. 

Your credit score and information about how you pay may affect how much money you get, how much interest you pay, or if you get any special deals in the future.

• You receive your application status, usually within ten minutes. We will send the loan funds to your bank account if approved. You can contact us at Simple Fast Loans to discuss options if you are declined.