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Soft credit pull
First, what is the soft credit pull? The reason it is important to understand the soft credit pull is because there is a lot of misconceptions about credit that circulate, and that make people weary of checking their credit, or doing things that might mean pulling their credit. Thus, it is worth noting that a soft credit pull will not affect your credit score. It is not something that is visible to other individuals or institutions pulling your credit, etc. Basically a soft credit pull is similar to when you check your own credit to see where it is at. It is a credit pull that is done when it is not related to a new credit issuance, so mostly it is used for monitoring, and for things like renting real estate. Secondly, it is important to understand soft credit pulls uses, for others, as well as for your business itself. A business owner may want to use soft credit pulls to do background checks on potential employees. A bank may do it to verify your identity, or a credit card company may use it to solicit you for pre-approved credit. The soft pull is what a mortgage company would do to pre-approve you for a loan BEFORE you are actually looking to get a loan funded. Third, understanding some of the facts about credit scores, and hard and soft credit pulls is important. For example, did you know your score can change five or more times a year? This means that doing a soft pull before you apply for credit for your business can help you feel more assured that you will be approved. A hard inquiry will show up on a credit report and can negatively impact your credit score, especially if there are too many of them. As this can be seen as attempting to get more credit than you can actually afford. Know your credit score, know how to use credit when running your business, and take the time to understand the differences in hard and soft credit pulls and their impact on your business. |
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