Detecting Financial Red Flags
Typically, a credit report will outline the amount of debt you have, the credit limits, and the current balance of each account. It will also flag any information considered critical to the lending decisions, this can include but not be limited to defaults, bankruptcies, and collection items. These factors and more aggregate to provide a score for the overall report, which is your credit score—the second most important metric to creditworthiness.
So in short, a lender or institution can determine the following from a soft pull. Your overall creditworthiness as reflected by your credit score and payment history. They can also quickly evaluate your financial history for any red flags such as defaults and gain an understanding of what products and services you may qualify for or already do.
Knowing this, you should now grasp the importance of keeping a close look at your credit report. Being aware of how you look on a credit report is key to understanding how lenders see you. This is why if you intend to purchase a home, solar panels, a vehicle or a myriad of other products and services in the future, the time to diligently manage your credit is now. By allowing you to check your credit report without harming your creditworthiness, soft pulls are the ideal solution to managing your credit effectively.
My soft pull is an educational resource sponsored by Credit Bureau Connection to inform people about soft pulls and how they are used in the lending process. Credit Bureau Connection (CBC) is authorized by all three major credit reporting agencies, Experian, TransUnion, and Equifax, and specializes in soft pull credit report solutions.