soft credit check

Soft Credit Checks: What Are They and How They Work

December 13, 2023 • 922 views

When it comes to finance terms, you must have come across the words ‘CIBIL score’, ‘credit score’, or ‘credit inquiries.’ These terms are related to your credit history and play a significant role in determining your creditworthiness. Maintaining a good credit score is crucial when it comes to securing loans or credit cards. However, checking your credit score can be a tricky task.
This is where conducting a soft credit check comes in handy. In this blog, we will dive deeper into the concept of soft credit checks and discuss their importance, benefits, and how they differ from hard credit checks. You’ll also learn how a soft credit check can help you maintain a healthy credit score without any negative impact on your credit report.

What is a Soft Credit Check?

A soft credit check is a type of credit inquiry that is conducted to check and verify your creditworthiness. It is also known as a soft inquiry or a soft pull. Soft credit checks are usually used by lenders, employers, or landlords to verify your creditworthiness and financial stability without impacting your credit score. Even you can conduct a soft credit check periodically to make sure your credit history is free of any errors.

The Importance of Soft Credit Checks

Soft credit checks are important because they allow you to check your credit score without negatively impacting your credit score. It allows you to monitor your credit score or to check your eligibility for loans or credit cards. Soft credit checks also help lenders and employers to make informed decisions about your creditworthiness without harming your credit score.

ALSO READ :- How To Improve Credit Score In 30 Days?

How Do Soft Credit Checks Differ from Hard Credit Checks?

Soft credit checks and hard credit checks differ in the following ways:

Category

Soft Credit Check

Hard Credit Check

Visibility

 Soft credit checks are not visible to other lenders or creditors.

Hard credit checks are visible to other lenders or creditors.

Impact on Credit Score

 Soft credit checks do not impact your credit score.

Hard credit checks can temporarily lower your credit score by a few points.

Purpose

 Soft credit checks are usually performed for background checks, pre-approvals, or when you check your credit score.

Hard credit checks are typically performed when you apply for a loan, credit card, or mortgage.

Authorization

 Soft credit checks do not require your explicit authorization.

Hard credit checks require your consent before they can be performed.

Frequency

 Soft credit checks can be performed multiple times without any negative impact on your credit score.

Hard credit checks should be limited to a few times a year to avoid significant drops in your credit score.

Benefits of a Soft Credit Check

There are many benefits of soft credit checks, which include:

  • No Effect on Credit Score: Soft credit checks allow you to check your credit score without any negative impact.
  • Update Credit Record: Soft credit checks help you monitor your credit and identify errors or discrepancies in your credit report.
  • Find Areas of Improvement: Soft credit checks can help you improve your credit score by identifying areas in which you need to make improvements.
  • Qualify for Pre-approved Offers: Soft credit checks provide a quick and easy way to pre-qualify for credit offers without affecting your credit score.
  • Employment Verification: Some employers may use soft credit checks as part of their hiring process to verify your employment history and financial stability.
  • Safeguard Against Theft: Soft credit checks help protect you against identity theft and fraud by allowing you to monitor your credit report regularly and detect any suspicious activity.
  • Free of Cost: Soft credit checks are often conducted free of cost, which can save you money and prevent unnecessary damage to your credit score.

ALSO READ :- Impact Of Loan Settlement Process on Your Credit Score...!

How to Conduct a Soft Credit Check for Credit Score

These days, it has become extremely easy to check your CIBIL score or credit score within a short time through verified third-party websites like Poonawalla Fincorp. You can conduct a soft credit check and determine your credit score by simply following the steps below:

  • Step 1: Visit the official website of Poonawalla Fincorp.
  • Step 2: Select the ‘Free CIBIL Score’ or ‘Get Your CIBIL Score’ tab to get started.
  • Step 3: Enter the required details, such as employment type, gender, and personal details like contact number, PAN card, and address proof.
  • Step 4: Go through the terms and conditions carefully before selecting ‘Agree’ and submitting the form.

Once the soft credit check process is complete, you will receive your credit score and your CIBIL report within a short time.

Conclusion

In conclusion, soft credit checks are an important tool for monitoring your credit score and improving your creditworthiness. They allow you to check your credit score without harming it and also help you identify any errors or discrepancies in your credit report. You can also conduct soft credit checks through verified third-party financing websites to receive your credit report quickly, without any negative impact on your credit score.

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply

poonawalla fincorp team

Poonawalla Fincorp Team

Our team of expert writers and editors are passionate about providing authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.

Trending Topics



Contact Us logo Quick Apply CIBIL Score logo Free CIBIL Whatsapp logo Connect on WhatsApp