Hard pull VS soft pull

[SDMarik]

From my understanding (some breif googling) a hard pull and soft pull show exactly the same thing, a hard pull just oficially indicates that someone is pursuing more credit, hence the inquiry and potential score hit.

So what would cause someone to be pre-qualified for something and then get denied once a hard pull is done, is there actually something that a hard pull shows that a soft pull will not?

[dragontears]

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@SDMarik wrote:

From my understanding (some breif googling) a hard pull and soft pull show exactly the same thing, a hard pull just oficially indicates that someone is pursuing more credit, hence the inquiry and potential score hit.

So what would cause someone to be pre-qualified for something and then get denied once a hard pull is done, is there actually something that a hard pull shows that a soft pull will not?

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Timing of the pulls can be a big factor. If your profile changes between when the SP was done and the HP it could result in a denial. The most frequent example of this you see around here is during "sprees" where once the HP occurs there are more inquiries than when the SP was done. 

There are other aspects that go into an approval other than credit information which could lead to a denial despite a preapproval. 

Finally there are lenders that have a so called "preapproval" when it is actually just marketing (i.e. Navy, BoA, etc)

[SoCalGardener]

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@SDMarik wrote:

From my understanding (some breif googling) a hard pull and soft pull show exactly the same thing, a hard pull just oficially indicates that someone is pursuing more credit, hence the inquiry and potential score hit.

So what would cause someone to be pre-qualified for something and then get denied once a hard pull is done, is there actually something that a hard pull shows that a soft pull will not?

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Thanks for asking this, as I've wondered about it, too. A lot of times we'll see a post where a person responded to a 'pre-approved' offer immediately after it was given to them, and they're denied. I mean when *nothing* changed between the time the corresponding SP and then the HP would've happened. Yet they're denied. I don't get that. I completely understand that if a person's profile changes substantially between the SP and the HP, that they could be denied, but what about when that's just not the case?

[cashorcharge]

I don't know this to be fact...but it feels like a SP Preapproval is taking into account some very high level "do you meet the criteria factors" and I'm not referring to you or your credit file...but what the system at the bank is looking at...during a SP preapproval, it may look at a few factors to determine general eligibility and agree you're preapproved...and then once an actual application is done and HP performed (greater scrutiny) another look and review is performed and determinations are made.  There are various preapproval tools...some give a CL and APR, some just say yes or no...

I don't think it's ones file, I tend to think it's how the FI has configured their system to determine eligibility from the "oh, who's this SP" process versus "lay it all out and decide HP Process" when applying.  

[SoCalGardener]

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@cashorcharge wrote:

I don't know this to be fact...but it feels like a SP Preapproval is taking into account some very high level "do you meet the criteria factors" and I'm not referring to you or your credit file...but what the system at the bank is looking at...during a SP preapproval, it may look at a few factors to determine general eligibility and agree you're preapproved...and then once an actual application is done and HP performed (greater scrutiny) another look and review is performed and determinations are made.  There are various preapproval tools...some give a CL and APR, some just say yes or no...

I don't think it's ones file, I tend to think it's how the FI has configured their system to determine eligibility from the "oh, who's this SP" process versus "lay it all out and decide HP Process" when applying.  

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That makes a lot of sense--but it leaves me wondering WHY? Why do it that way when all the same information is available to them both ways? Why bother getting someone's hopes up when you have the information right there that's going to cause their being denied? I don't know, I just think it's silly! But I do think you're right.

[donkort]

I've had MANY soft pulls.

NONE of them ever showed up on my credit report.  Nor affected my score.

[SoCalGardener]

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@donkort wrote:

I've had MANY soft pulls.

NONE of them ever showed up on my credit report.  Nor affected my score.

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I don't recall right now which report I was viewing, but it had *TONS* of SPs on it, a lot of them from Discover, but also all of my other current creditors AND a bunch of companies I don't even do business with! It was not one of the usual sources I use, such as CK or WH...I'm thinking it might have been Annual Credit Report or Lexis/Nexis. Whatever it was, I was shocked at how many [SP] inquiries I've had. Since they didn't have any impact on my score, it didn't really matter--but it was a surprise.

[dragontears]

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@donkort wrote:

I've had MANY soft pulls.

NONE of them ever showed up on my credit report.  Nor affected my score.

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You can only see your SP on the full report from annual credit report  

[donkort]

Yep....that's true : - )

[FinStar]

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@cashorcharge wrote:

I don't know this to be fact...but it feels like a SP Preapproval is taking into account some very high level "do you meet the criteria factors" and I'm not referring to you or your credit file...but what the system at the bank is looking at...during a SP preapproval, it may look at a few factors to determine general eligibility and agree you're preapproved...and then once an actual application is done and HP performed (greater scrutiny) another look and review is performed and determinations are made.  There are various preapproval tools...some give a CL and APR, some just say yes or no...

I don't think it's ones file, I tend to think it's how the FI has configured their system to determine eligibility from the "oh, who's this SP" process versus "lay it all out and decide HP Process" when applying.  

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Yes, you're on the right track.

The SP criteria will depend on the institution (CU, FSB, brokerage, large or mid-sized institution, etc.) the product, and their proprietary software. Not all SP decision engines are created equal. Some SP decision engines pick up everything (which can include other sources of data besides the 3 CRAs), which may or may not require a HP, others do not. Again, depends on the institution, their internal UW policies and the systems they use to arrive to a decision. Some have the flexibility to provide a credit limit, others do not (or supress the data), it just depends. But, by and large, if an institution's decision engine/software has the capability and is configured where SP data=HP data, then the data is equivalent on both sides. A lot of the algorithmic and AI criteria is built into these decision engines.

There are varying degrees of how and where SPs/HPs are used with examples ranging from Chase, Regions Bank, TRUIST, American Express, FNBO, Capital One, SYNCB, Comenity Bank, Goldman Sachs/Marcus plus a plethora of FinTechs and CUs.