Question of the Week

Question: How are soft credit pulls supposed to work?

Answer: A “soft pull” or pre-screening request is when a creditor wishes to know if a certain category of consumers may meet the requirements for a certain credit product. The FCRA permits this and allows a credit reporting agency to give a list of names of persons that qualify, as long as the creditor promises a firm offer of credit to all those persons who meet the standards (and can verify it). The creditor also has to add an opt-out notice to the offer, so that the consumer can notify the credit bureau that the consumer does not want to receive future notices.

No actual credit information is actually shared here, as the creditor only knows that the person meets the standards for the credit.

This different from a “hard pull,” which is when a creditor receives permission from the member (either in connection with a business transaction initiated by the member or explicitly from the member) to get a look at all the information on the member’s credit report. This is what we do when a person applies for credit to see if they qualify.