Glossary
Soft credit pull vs. hard credit pull
A soft credit pull reviews a consumer credit file without affecting the score, while a hard inquiry is tied to an application and may affect the score.
A soft credit pull reviews a consumer credit file without affecting the credit score. A hard credit inquiry is generally associated with an application for credit and may affect the score. The inquiry type depends on the company, purpose, authorization, and stage of the financing process.
Key takeaways
- Soft inquiries do not affect consumer credit scores.
- Hard inquiries may have a small score impact and can be visible to other lenders.
- A broker’s initial screening and a funding partner’s formal application are different stages.
- Ask who will pull the report, which bureau will be used, and whether the inquiry is soft or hard.
- VeriFunding’s initial intake does not authorize or trigger either type of inquiry.
Comparison
| Question | Soft credit pull | Hard credit pull |
|---|---|---|
| Affects score? | No | May affect the score |
| Visible to other lenders? | Generally no | Generally yes |
| Common purpose | Prescreening, account review, consumer request | Application for credit |
| Requires application? | Not necessarily | Commonly tied to an application |
| Can appear in equipment finance? | Yes | Yes, depending on partner and stage |
The Consumer Financial Protection Bureau states that soft inquiries do not affect credit scores and are generally visible only to the consumer, while hard inquiries are associated with applications and may affect scores.[1]
Where each may occur
Initial broker intake
A basic intake can collect business and equipment information without accessing consumer credit.
VeriFunding’s initial request:
- Does not require an SSN
- Does not authorize a credit report
- Does not trigger an inquiry
Prequalification or program matching
Some funding partners use a soft inquiry to evaluate possible fit. Others rely on stated credit information until a formal application.
A soft result is not necessarily final approval.
Formal application
A funding partner may require a hard inquiry after the business chooses to proceed and signs authorization. Some partners continue to use a soft inquiry. Ask before signing.
Before funding or later account review
A funding partner may update credit or perform another permitted review depending on the process and agreement. Confirm whether more than one inquiry is expected.
Common misconception: every financing quote is a hard pull
Not necessarily. Some early reviews use no credit or a soft inquiry. The problem is assuming the inquiry type without asking.
A clear question is:
Which company will obtain my credit report, will the inquiry be soft or hard, and could another inquiry occur later?
How to control unnecessary inquiries
- Start with basic fit information
- Ask which partner will receive the request
- Read the authorization
- Avoid simultaneous submissions to unknown sources
- Do not provide an SSN before verifying the recipient and purpose
- Keep application information consistent
- Review your own reports before applying; requesting your own consumer report does not hurt your score.[2]
Sources
Frequently asked questions
- Does checking my own credit hurt my score?
- No. The CFPB states that requesting your own report does not hurt your score.
- Can a hard inquiry cause a decline?
- The inquiry itself is usually a small factor. Frequent recent applications can indicate new-credit risk, and the underlying report drives the decision.
- Are business-credit inquiries the same?
- Commercial credit reports and scoring models work differently from consumer FICO scoring. Ask the business bureau or funding partner how inquiries are treated.
- Will starting with VeriFunding affect my credit?
- No. The initial intake does not authorize or trigger a credit inquiry.