Lenders Perspective: Is There a Difference Between... - myFICO® Forums

AutisticPretzel · ‎08-24-2022

I couldn't seem to find any clear information on this on the internet, so I figured this would be a good place to ask.

From the viewpoint of what a lender can or can't see on a report, is there any discernable difference between a soft pull inquiry and a hard pull inquiry? I've always understood a hard inquiry to essentially be a formalized or official request for credit but I've never understood if the information contained in a soft pull may be more limited than the actual hard pull.

Is a hard pull on your credit truly just "due diligence" on the lending institutions behalf or is there more to it? Of course I understand the implications on the consumers behalf, but I've always been curious about this aspect of it. It's always made me wonder why some people can successfully be "pre-qualified" for a particular credit product and then denied when an official application is submitted with the exact same information.

Thanks for any insight you can provide!

simplynoir · ‎08-24-2022

As you already laid out the only real discerning difference between a soft pull and hard pull is that at the bank's discretion a HP indicates a request for credit whether that comes in a form of an application, additional credit, loans and so on. A few banks like AMEX allow current customers for the most part to apply for other products without a hard pull being performed

With pre-qualified offers presumably those are cursory checks to see if a customer meets criteria to be suggested/offered a credit card. From there assuming there is interest there are probably additional checks being done when a hard pull is performed. Some of these include any prior/current history with the bank (internal scoring algorithm) and check other sources to verify information such as work number for employment and Innovis/Sagestream for income/assets/etc as a few examples

SouthJamaica · ‎08-25-2022

@AutisticPretzel wrote:
I couldn't seem to find any clear information on this on the internet, so I figured this would be a good place to ask.

From the viewpoint of what a lender can or can't see on a report, is there any discernable difference between a soft pull inquiry and a hard pull inquiry? I've always understood a hard inquiry to essentially be a formalized or official request for credit but I've never understood if the information contained in a soft pull may be more limited than the actual hard pull.

Is a hard pull on your credit truly just "due diligence" on the lending institutions behalf or is there more to it? Of course I understand the implications on the consumers behalf, but I've always been curious about this aspect of it. It's always made me wonder why some people can successfully be "pre-qualified" for a particular credit product and then denied when an official application is submitted with the exact same information.

Thanks for any insight you can provide!

It's my understanding that lenders cannot see the soft pulls.

As to your question about prequalifications, (1) there is often a substantial time difference between the soft pull that led to the prequalifiction and the submission of the application, and (2) the prequalifications are issued in response to a search for certain factors, while the credit application review takes into account a number of additional factors.