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 utilization ratio The share of your available revolving credit you are currently using — the second-biggest factor in your credit score, after payment history.
- 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.
- Short sale Selling a home for less than what is owed on the mortgage, with the lender's approval — an alternative to foreclosure.
- Secured A loan backed by an asset the lender can seize if you default — a house, a car, or a deposit.
- Bridge loan A short-term loan that "bridges" a gap — most often financing a new home purchase before your current home sells.