Point Reflection of Approval

[samarrone]

I was told by someone that if you are approved with a creditor, you do not receive a hit to your credit and the inquiry is veiwed as a soft pull. Anyone care to enlighten me on this.

[Anonymous]

Hi samarrone,

Most (not all) creditors do a hard pull to check you out when you app for a new account.  The nature of a hard/soft pull is not dependent on whether you are approved.  

ETA:  If you are approved, and the account shows on your credit report, there is often (not always) a score impact.  That's because of 1) the inquiry; and most significantly 2) the new account itself.  New accounts impact AAofA, number of accounts open, and - if you report a balance on that new account - number of accounts reporting a balance. New accounts (along with your other accounts) also impact utilization.

Is there a particular lender you're thinking about?

[samarrone]

I was going for a citibank, but that wasn't my concern. I was told that if your approved the inquiry would classify as a soft and not a hard. I was just looking for some clarification from the pro's since I have never heard of this theory. Thanks.

[llecs]

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@samarrone wrote:

I was going for a citibank, but that wasn't my concern. I was told that if your approved the inquiry would classify as a soft and not a hard. I was just looking for some clarification from the pro's since I have never heard of this theory. Thanks.

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Regardless of who the CC may be like with Citi and any other CC, it'll always be a hard pull whether you are approved or denied. Now in some instances, and it's a YMMV on lender, some CCCs will issue you a pre-approval. With some CCs, that app would result in a soft pull. These aren't that common.

And ditto to beamMEup above in reference to your credit hit. Adding any new CC will usually result in a score loss. 

[RobertEG]

+1

The inquiry is recorded at the time it was made based on its stated permissible purpose.

Later approval of the app for credit does not alter the reason for the inquiry.

[LS2982]

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@samarrone wrote:

I was told by someone that if you are approved with a creditor, you do not receive a hit to your credit and the inquiry is veiwed as a soft pull. Anyone care to enlighten me on this.

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Not true. Almost all new credit applications are considered hard pulls. CLI's on new accounts are usually soft pulls.

[pizzadude]

I don't know of any creditor that will extend an initial line of credit without a hard pull.   Every now and then someone reports that they got a Visa or MC from some bank with only a soft, but that happens very sporadically.  

Sometimes banks or CUs will offer multiple products based on a single hard pull, like a Auto loan and CC.

Some creditors will increase your existing CL with only a soft pull.  However many still require a hard pull for this.

[RobertEG]

The whole issue of how a credtior "reports" an inquiry as "hard" or "soft" remains a mystery to me.  Maybe someone can explain.

I suppose two things.  One, that a credtior provides a stated permissible purpose when an inquiry is made.  And two, that somehow this statement of permissible purpose gets converted to a credit report code, recording the inquiry and its associated purpose.

But how is this done?  Does the creditor merely provide a permissible purpose, and the CRA matches it with the proper code corrresponding to this purpose, or do the creditors actually provide a code number?  If the CRA matches the purpose to a code, it would seem that all inquiries related to a consumer's intiation of a request for new credit would be coded the same, and thus scored by FICO.  One purpose, one code.  Is there a code that somehow records an intiation of new credit, yet is able to shield that purpose from FICO scoring as being something less?  Is it a creditor decision? 

Since identification of a consumer's initiation of new credit is the primary reason why inquiries are recorded, why would there be a code that records it in a manner that FICO would not score?  Are phony reasons required to do this?  It all remains a mystery to me....

[Anonymous]

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@samarrone wrote:

I was told by someone that if you are approved with a creditor, you do not receive a hit to your credit and the inquiry is veiwed as a soft pull. Anyone care to enlighten me on this.

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While the general consensus is you will most likely have a INQ on your report when applying, there are a few times that it may not cause an INQ.

1. As stated earlier when pre-approved and accept the offer and your credit report still meets their standards. YMMV

2. When purchasing something and your name and address is given for some type of purpose such as delivery, or purchase online and once again you are pre-approved and offered credit. YMMV

3. When already have an account open in good standing and seek an additional product with them. YMMV