The main difference between soft and hard credit report checks


Running credit report checks on rental applicants is really a landlord best practice, although not all credit report checks are produced equal.

The way they differ matters, especially to renters, and may help landlords set their rental listings apart while developing trust with applicants.

Credit queries, or pulls, are available in two varieties: “hard queries” and “soft queries.

Hard queries lower an applicant’s credit rating whereas soft queries don’t.

Soft Queries

Soft queries are credit report checks which are typically purchased through the consumer when viewing his very own credit history, and therefore cannot affect lending decisions.

Checking your personal credit through most third-party sites, or even the official official government-backed site, counts like a soft inquiry.

The customer isn’t the only entity capable of singing a gentle inquiry. Charge card or mortgage firms that you already work with may sometimes sign in in your credit and lending behavior through soft queries.

This is comparable to what sort of landlord will “drive by” their property, just to evaluate it, although not go indoors.

Examples of Soft Queries

A soft inquiry occurs if you pull your personal credit, no matter who you share it with, or whenever a business “peeks” to your credit report but doesn’t get every detail.

  • Checking your personal credit
  • Charge card or loan offers which are “pre-approved”
  • Employer credit assessment
  • Identity verification by companies or banks

Hard Inquiries

However, trying to get a charge card, mortgage or any other type of mortgage always triggers a tough inquiry. These pulls negatively effect a consumer’s credit rating because credit agencies think that each hard inquiry is connected to a different loan or charge card – therefore altering the quantity of overall debt and risk using the consumer.

Hard queries take into account 10 % from the overall credit rating, show up on an individual’s credit history for 2 (lengthy) years, and lower one’s credit rating for just one year. The precise decrease in score from a number of hard queries is determined by each person’s unique credit rating.

Examples of Hard Queries

Generally, a tough inquiry occurs whenever another person pulls your credit together with your permission.

  • Mortgage applications
  • Charge card applications
  • Car loan applications
  • Education loan applications
  • Traditional Tenant Screening

While credit rating companies may count multiple hard queries of the identical type inside a almost no time like a single inquiry, it is also entirely possible that separate queries is going to be counted individually and accumulate, creating a significant hit towards the person’s credit rating.

When Cozy CEO Gino Zahnd was relocating to Bay Area, a possible landlord utilizing a third-party credit history site, accidentally ran his credit score six occasions in three hrs. Gino’s credit rating dropped dramatically, and it took a while for his score to recuperate.

Gino bounced back and located another home, however the potential landlord unnecessarily damaged Gino’s credit. The harm might have been prevented when the landlord had used something that pulled a gentle inquiry.

Some Queries can be difficult or Soft

While some kinds of pulls always register as hard queries along with other types always count as soft queries, some could be either hard or soft, based on different facets for every situation.

For instance, vehicle rentals may cause a gentle pull when the vehicle is reserved having a charge card or perhaps a hard pull when the reservation is guaranteed with debit cards.

Traditional third-party screening companies cause hard queries, while any inquiry that directly requires the applicant is recognized as a gentle inquiry.

Types of Hard or Soft Queries

With respect to the tool accustomed to pull the loan, these queries could be either hard or soft.

  • Rental Application/Lease
  • Vehicle Rental Agreement
  • Opening a Checking/Checking Account
  • Mobile Phone, TV, or Internet Agreement
  • Utility Service Agreement

The Negative Impact on Renters

For renters in high-density metropolitan areas, securing a home might take several weeks. In Bay Area, the typical renter pertains to 10 rentals prior to signing a lease.

I believe that searching for any spot to live shouldn’t hurt your credit.

Similar to Gino, every time a renter applies for any property, their credit is negatively affected, with each pull lowering the applicant’s score with a couple of points. It’s an entire nightmare for renters across the nation.

Landlords Possess the Choice

For landlords, there’s no real help to pulling a tough inquiry more than a soft one. The details are exactly the same, although the approach to obtaining it’s different.

Method 1: Hard Inquiry

A landlord asks the tenant to complete a paper application, including their Ssn, as well as an authorization to drag credit.

The owner then faxes, scans, or emails individuals documents to some third-party background screening company who then uses their reference to the loan bureaus to drag the applicant’s credit.

Since the tenant didn’t have direct participation in the credit request, this kind of pull would count like a hard inquiry.

Method 2: The Soft Inquiry

CR_sampleWithin the last 5 years, the 3 major credit agencies have begun offering and have partnered with companies like Cozy to offer landlords the opportunity to order credit history with the aid of the tenant.

The good thing about this method is that the landlord will no longer have to gather a Ssn, and since the tenant is active in the credit pull, it doesn’t hurt their credit rating.

By requesting a credit assessment via a service designed particularly for landlords, for example Cozy Credit History, you will always pull their credit information like a soft inquiry. Subsequently, you’ll will also get unparalleled security, privacy and control that will alleviate you from the burden of handling, storing, and getting rid of sensitive information. It’s victory-win for everybody.

Related: Build credit history simply by having to pay your rent


If you are still faxing applications to traditional screening companies, please stop. There’s you don’t need to hurt your future tenants credit rating. Smart landlords are really advertising they perform soft queries when screening tenants. For individuals renters who worry about their credit rating, it’s an attractive benefit.

Smart landlords begin to see the value in saying,

I have to request a credit history. But take it easy, it will not affect your credit rating one bit.

Plus, it’s a good way to allow your future tenants realize that you’re a significant landlord, and you care the way your actions affect them. Within the finish, it’s an excellent way to begin a strong landlord-tenant relationship.


Bank of America Understanding the difference between a soft and a hard credit check on your credit