top of page

What Landlords Should Know About Hard and Soft Credit Checks

In another article, we tackled the importance of credit checks when vetting possible tenants. The information included in the process was discussed like past addresses and bank account history. These records can indicate a renter's capability to meet the payment terms of a lease in a timely and consistent manner.


Today, the focus will be on the two types of credit checks – hard and soft inquiries. Outlined below are their common attributes as well as key differences.


Only hard inquiries impact credit score


There may be potential tenants who are hesitant to provide permission for a credit check. That's because they might have the notion that it will impact their credit score. It's vital to dispel any doubts a possible tenant may have by explaining the difference between hard and soft inquiries.


A hard inquiry affects credit score because it's directly associated with a credit application, like a loan or credit card. It's different from a soft inquiry or soft pull, which is more of a general request for information about a person's credit history. A report on how landlords use credit checks mentions that payment due dates and income-to-debt ratio are some of the details considered for rental agreements. These may already be shown in the results of a soft inquiry, which is why a tenant screening is tagged under this type of credit check.


Tenant screening is classed as a soft pull


Given the relationship above, tenant screenings are classed as soft pulls because the application involved is not a kind of credit. In simple terms, the provider or supplier – in this case, yourself as a landlord – is not lending money. The offer on the table is tenancy. The accomplished rental application points to it as the object of interest, as opposed to a financial product.



Soft inquiries may occur without permission