Every time you apply for a credit card, the card issuer pulls up your credit score to see if you’re eligible. This is known as a hard inquiry and can temporarily pull down your credit score. If you’re worried about the effect of hard inquiries on your credit score, or if you’re concerned that your low score may not get you approved, then you may consider “soft pull credit cards” a better alternative choice.

But, are soft pull credit cards really worth it? What’s the catch if the credit card issuer doesn’t check your credit score before approval? Let’s find out more about soft pull credit cards and evaluate whether they’re the right choice for you.

What is a soft pull credit inquiry?

A soft inquiry or soft pull happens when you or someone you authorise checks your credit score and credit report. These inquiries can also occur without your permission. For example, when a credit card company pre-screens potential customers to offer them pre-approved cards.

Soft pulls do not have any impact on your credit score. In other words, they do not bring down the numbers.

On the other hand, a hard pull or hard inquiry happens when a third-party, usually a lender or credit card agency, requests for your credit score. These inquiries stay on your credit report and are likely to bring down your credit score by a few points temporarily. Luckily, the effect of a hard inquiry on your credit report will fade away within a year, and your credit scores will bounce back to normal before that.

What are soft pull credit cards?

As the term implies, soft pull credit cards require only a soft pull/soft inquiry for approval. These cards skip hard inquiries during application. As a result, your credit score is not impacted when you apply for these cards.

Wow! That sounds good. Does that mean soft pull credit cards are the right choice for me? Yes and no. While soft pull credit cards do not impact your credit score, they may not always be the right choice. Let’s explore why.

Pros of Soft Pull Credit Cards

  • No hard inquiries on your credit score during approval. Hence, your credit score remains intact.

This is a significant advantage for people who have low credit scores. Additionally, soft pull credit cards also work well for people who are looking to take a loan immediately and cannot afford their credit scores to drop.

Cons of Soft Pull Credit Cards

  • Limited Choices

One of the most significant drawbacks of soft pull credit cards is that they are incredibly difficult to find. They are not readily available, and only a few credit card issuers offer them. So, unlike regular credit cards, you have minimal choices. When you opt for a soft pull credit card, you will likely miss out on the rewards, loyalty bonuses, and other perks offered by regular credit cards.

  • Secured Credit Cards

Most soft-pull credit cards are likely to be secured credit cards. Generally, secured credit cards require you to open a fixed deposit for card approval. The credit limit on the card is fixed at 80 – 90{3a30f60f1a77b4cb4223181b6240a20dd4b2c886ed004be55cf133d43162d7a5} of the fixed deposit amount. So, let’s say you open an FD for Rs. 1 lakh. Then, your new secured credit card may offer you a credit limit of Rs. 80,000 to Rs. 90,000.

As you can see, this requires you to make an investment before you’re approved for the card.

Is a soft pull credit card worth it? Should you opt for one?

The blunt answer here is that – soft pull credit cards aren’t often worth it. You can indeed find other better credit cards in the market. Also, the impact of the drop in credit scores when you apply for a regular hard pull credit card is only temporary. It doesn’t cause lasting damage to your credit score.

To explain this better, let’s understand the impact of a hard inquiry on your credit score. New inquiries make up only 10{3a30f60f1a77b4cb4223181b6240a20dd4b2c886ed004be55cf133d43162d7a5} of your credit score. Hard inquiries are a less influential factor than other elements that make up your credit scores like – on-time payments, debt utilisation ratio, and credit history.

Even if hard inquiries bring down your credit score by a few points when you apply for a new credit card, remember that this drop is only temporary. Your credit scores will bounce back to normal (or increase) once you start paying your new card bills on time.

When does it make sense to apply for a soft pull credit card?

There are two scenarios when opting for a soft pull credit card with no credit check may be the sensible choice.

  1. When you have low credit scores and are unlikely to be approved for other cards. However, remember that soft pull credit cards do not offer many benefits. It may be better to improve your credit scores and then apply for a regular credit card that gives you the best rewards and savings opportunities.
  2. When you have zero credit history and are looking to build your credit profile. In this case, opting for a soft pull credit card and paying bills on time will help you boost your credit history and scores. Once you have increased your scores, you can apply for a regular credit card loaded with added features and benefits. Even in this case, remember that there are plenty of credit cards available for individuals with zero credit history. CreditMantri, a leading credit card aggregator, can help you shortlist the best credit cards matched to your credit profile.

Bottom Line

Soft pull credit cards that do not require credit checks do not offer the features and benefits of regular credit cards that come with hard inquiries. If you have a high credit score that makes you eligible for other cards, it’s probably best to give soft pull credit cards a pass. Remember that a hard inquiry doesn’t have much of an impact on your credit score and is only temporary.

On the other hand, if you have low credit scores or are working on building your credit history from scratch, a soft pull card that doesn’t affect your score may be the better choice.

Irrespective of the category you fall into, it’s always wise to use an online credit card aggregator like CreditMantri. The platform lists all the cards available in the market and can help you choose the best credit card for you, based on your credit profile. This way, you get an idea of the right cards for you without having to check with multiple credit card companies separately.

Evaluate the pros and cons of soft pull credit cards and decide if it’s the right choice for you.