Difference between SP vs HP, What is it?

[Dave4fun]

So what is the difference in the data provided to a credit grantor in the soft pull inquiry vs. the hard pull inquiry? It seems to me they get pretty much the same over all data. Perhaps more details in account history, ie hi/low balance info in a hard inquiry I'm guessing. So why aren't soft pulls counted as hard pulls if they provide pretty much the same data? But the Hp results in a points ding and the SP does not. I would like to know what is the difference in data output between the two inquiry types. Experts please chime in.....and thank you! 

[Anonymous]

Hard pulls are done when YOU are applying for credit/membership.  Soft pulls can be things like account reviews, prequalifiers, insurance quotes, etc.  Let's take insurance quotes for example.  In many states, if you want car insurance you better believe they will run your credit.  Since you are not applying for credit, the pull is soft and does not affect your scores by having them check it.  It is standard procedure for creditors to do account reviews periodically.  Since you are not applying for anything new, this is a soft pull also.

[Dave4fun]

Thanks Overmed for the reply.  I'm trying to figure out what is different in the data elements provided by the two inquiry types. For some new credit requests (example American Express cards/accounts, some banks credit line increase requests (ie. Sync, Discover, BofA) soft pulls are used instead of Hard. So what is the difference in the data ouput to the Grantor? 

[RobertEG]

A so-called soft pull is an inquiry which is not recorded/shown in credit reports of the consumer that are subsequently provided to others.

They are only recorded/shown in credit reports that are provided to the named consumer.

A so-called hard inquiry is one which is recorded and shown in all credit reports, including those provided to others.

There is, with only one exception, no difference in the substance of the information included in the credit report.

The FCRA provides for a special type of credit inquiry that cannot, by statute, be shown in credit reports made available to any party other than the named creditor.  More specifically, FCRA 604(c) permits creditors a special process of submitting specific criteria to a CRA, and having the CRA screen their credit files and produce a listing of consumers, by name and address, that meet the submitted screening criteria.  It is the only form of inquiry that can be filled where the consumer has not initiated any request for credit or insurance.  That then permits the creditor to make firm offers of credit to only those consumers who meet specified criteria, thus avoiding the time and cost of mass mailings.  By statute, such promotional inquiries cannot provide the creditor with any account-specific information, and basically comprise only a listing of names and addresses.

CRA policy permits creditors to also report a soft-inquiry coding of essentially any inquiry that is normally coded hard, and thus normally recorded and reported in subsequent credit reports of the named consumer.  That includes normal inquiries based on a consumer-initiated request for credit, and thus it is common for some consumer-initiated requests for credit to become excluded from credit reports, and thus from effect on scoring.

[Anonymous]

Dave,

So glad you posted this question because I have been curious, and everyone else, thank you for answering. I thought a SP was just the credit score with no additional info.  This makes me feel much better about pre-approvals!

[Dave4fun]

Thanks so much for detailed response Robert. If I understand correctly, the typical soft and hard inquiries data out put is the same. The credit grantor Initiating the request determines the coding as hard or soft. Is that right?  Then we have the promotional inquiries that are hidden, and you explained what the data output is for those. 

[RobertEG]

Essentially, yes.

However, the inquiree does not necessarily have to include a specific request for coding as "soft".

Certain types of inquiries are handled, per CRA policy, as "soft", meaning they are automatically removed from inclusion in credit reports provided to others, based solely on their stated permissible purpose, without any need for the inquiree to provide any instructions or coding instrucing as such.  Every inquiry is required, under the FCRA, to provide a statement of its permissible purpose, which must then be one or more of the reasons set forth under FCRA 604, before the CRA can fill the request.  The stated permissible purpose can, in and of itself, determine whether the CRA then treats the inquiry as soft or hard.

More specifically, any inquiry made by the named consumer to view their own report, an inquiry made by an existing creditor for internal account review purposes, or inquirees for employment purposes, are treated under public CRA policy as "soft" based on the stated permissible purpose.

Other types of inquiries that are normally posted as "hard" can be treated as "soft" if the CRA is provided soft-coding instructions.

The exact procedure and method for a creditor to code an inquiry that is normally for a permissible purpose that is coded as "hard" is not published in any CRA documents or manuals of which I am aware, and are specifically not covered in the common CRA credit reporting manual, the "Credit Reporting Resource Guide," as inquiries are not considered credit reporting, but rather are the opposite.  They are requests to see what others have reported to the CRA.

Thus, the specific criteria that the CRA will accept, for example, coding of an inquiry that is stated for the permissible purpose of consideration of a consumer-initiated request for credit, which is clearly and normally coded as "hard" to subjectively, at the creditor's request, be recorded as "soft," is not precisely known.

[Dave4fun]

Robert thank you again for the very detailed response. You thoroughly answered my question. This was  something I was so unclear about for years. I very much appreciate this. Thanks for being for being there...for all of us!