There are several ways of how credit history gets verified
Take a look at some of the examples below.
How inquiry is made regarding a credit check is normally divided into 2 categories:
- – Hard
- – Soft
These 2 methods are used when credit report is pulled out from the records of the 3 major agencies of credit reporting:
- – TransUnion
- – Experian
- – Equifax
This type of background check is normally required prior to making a lending decision but occasionally serious employment decisions also pertain to credit history checks. As far as loan goes, the interest rate and terms depend a lot on the past individual history.
Use of Background Check
A complete report on the credit history that also includes an individual’s credit score is called Hard Background Check. On the report the name of the company is also given which was behind pulling he report. Soft inquiry on the other hand pulls credit history that is not as detailed as the hard report. It does not provide complete credit history. Also it’s only an inquiry not a credit report as opposed to hard background check.
Hard Background Verification type
A hard credit inquiry is a very detailed information about an individual`s credit history. Also it normally involves consent of the person on whom the credit check is run. The reason behind getting consent from the individual is required because it involves the social security number as well. So normally when a loan is applied, its asked if a credit check be done or simply a hard inquiry be done before any proceedings on the matter.
Soft Record Background Verification method
A software background check is the check run on the credit history of an individual when a prospective candidate is considered for a job role. This might be during the pre-screening process during the course of recruitment. The pre-approved credit card applications that one receives in the mailbox are the results of the credit checks made through the soft inquiry. Soft inquiries are run without any prior consent of the individual.in an individual runs credit history check on himself it will also be called soft inquiry.
Effects of Background Check
Hard Inquiry is not good for credit score, because it brings it down with every time it’s made. Having said that, it does not effects a credit history adversely as much as late payments do, but they definitely tarnish a clean background which will not be good when later you want to apply for loan.
Continuous hard inquiries may lead to denial to the loan request and a bad credit score. A soft inquiry on the other hand does not do that. It does not affect credit score in any way. So it’s always a good idea to run a soft background check instead of hard, however in cases where additional more thorough record verification check is needed then it makes sense to proceed with additional hard check, in either cases there is one site that can do both hard and soft types of verification.