Glossary
Soft credit check
A credit check that does not affect your score — used for pre-qualification, background checks, and checking your own report.
A soft inquiry lets a lender or you yourself view a credit report without any impact on the score, and it is invisible to other lenders. Pre-qualification offers, checking your own score through a bank or app, and background checks by employers all use soft pulls. It is what makes rate-shopping essentially free: comparing pre-qualified offers from several lenders costs you nothing in score, since only accepting and formally applying triggers a hard inquiry.
Related terms
- Credit report The detailed record of your borrowing history that your credit score is calculated from — maintained by the three national bureaus.
- Subprime loan A loan made to a borrower with a low credit score, priced with a higher rate to offset the added default risk.
- Credit utilization ratio The share of your available revolving credit you are currently using — the second-biggest factor in your credit score, after payment history.
- Co-borrower A second person who shares ownership of what a loan financed and is equally responsible for repaying it from the start.
- HELOC A revolving credit line secured by your home, usually at a variable rate — draw and repay as needed, like a credit card backed by the house.
- Amortization The schedule that splits each payment between interest and principal. Early payments are mostly interest; the balance flips near the end of the term.