Hard pulls vs Soft pulls: content difference?

[mkhan1093]

Hey all,

So I know the practical differences between hard pulls and soft pulls: hard pulls ding your score down a few points, these pulls eventually are removed from the report after a while, soft pulls are "harmless", etc etc. My main question is what exactly is the reason that hard pulls affect your score while soft pulls do not. Does a hard pull contain any more information than a soft pull? Like does a soft pull request very basic things like overall UTL, while a hard pull may be more detailed containing UTL for each account in addition to overall UTL?

Or are they differentiated by the reason the pull was initiated in the first place? Meaning they contain the same information, but hard pulls symbolize a desire for more credit while soft pulls represent only a background check to make sure you're not a delinquent?

Thanks!

[Anonymous]

Basically what you said second above.  Both types of pulls provide the same information to whoever is looking at them.  A HP is taken when someone is applying for new credit or sometimes additional credit (HP CLIs).  This leaves an inquiry on your report for 2 years that lets everyone know that you were seeking new/additional credit.

[Anonymous]

As BBS says, it is your second idea that is closest to the mark.

It's worth pointing out that even when a person is manifestly seeking additional credit -- for example, a request by the consumer to increase his credit limit on a credit card -- the creditor still has the option to tag the resulting credit pull as soft.  Three years ago, most CLI requests resulted in a hard pull; now most result in a soft pull.  (Though some creditors always choose the hard pull, e.g. BOA.)

Some lenders do this even when a person is applying for certain kinds of loans, e.g. Alliant's soft pull when you apply for its Share Secure Loan.

My guess is that when a possible pull is in a "gray area" (e.g. a CLI, or an SS loan) some creditors are motivated to make it soft by the desire to attract new customers or keep existing ones.  A hard pull helps the lender's competitors, but doesn't help the lender itself, so marketplace competitiveness can influence the final hard/soft decision.

[Anonymous]

CGID makes good points above.

In thinking about it CGID, I can think of a way that a creditors HP could be a benefit to them as well.  Say they deny someone for credit which of course places a HP on the report of the applicant.  If they apply again with the same creditor the following year, they (whether automated or manual) would be able to see that HP.  Without the presence of an actual account in the event that they were approved, without the HP would they know that the applicant had previously applied and been turned down? 

[mkhan1093]

---

@Anonymous wrote:

CGID makes good points above.

In thinking about it CGID, I can think of a way that a creditors HP could be a benefit to them as well.  Say they deny someone for credit which of course places a HP on the report of the applicant.  If they apply again with the same creditor the following year, they (whether automated or manual) would be able to see that HP.  Without the presence of an actual account in the event that they were approved, without the HP would they know that the applicant had previously applied and been turned down? 

---

I know the question wasn't directed at me (thank you all for the answers to my question), but banks probably have a record of all applications (at least up to a certain point in the past) whether or not HPs were done.

[Anonymous]

I agree, I'm just not sure that automated system approval/denial software and/or a MR would show that a previous application was submitted, but certainly the HP would be seen.

[Anonymous]

While I can't say what I know for certain regarding this particular data point because of NDA's, I will say that BoA knew someone using my SSN logged into their website in 2004 when I spoke with them on the phone yesterday.