What "pulling credit" actually means
When a lender, broker, or other party "pulls your credit," they are requesting a copy of your credit report from one or more of the three major credit bureaus — Experian, Equifax, and TransUnion. The report shows your credit accounts, balances, payment history, public records, and other inquiries.
Every time someone requests that report, a record of the request is added to your file. That record is called an inquiry. There are two kinds: soft and hard. The difference between them is the single most misunderstood thing in personal credit.
The crucial difference: who sees what
Your credit report has, in effect, two layers:
- What you see (your personal copy): both soft and hard inquiries appear here.
- What other lenders see: only hard inquiries appear. Soft inquiries are filtered out before the report is shared with third parties.
This is why a soft pull is sometimes called "invisible" — it's not invisible to you, but it is invisible to anyone else considering whether to lend to you. That's also why it doesn't affect your score: the FICO algorithm only counts what other lenders can see.
The implication for business owners: A trustworthy small business funding broker should be able to compare 20+ lender offers for you using a single soft pull. If they tell you they need to run a hard pull just to see what you qualify for, walk away.
When each type of pull is used
Soft pull scenarios
- Loan pre-qualifications — including The Broker Shop's 2-minute pre-qual flow
- Credit card offers in the mail ("you're pre-approved!")
- Employer background checks
- Periodic account reviews by your existing creditors
- Insurance quotes
- Checking your own credit (always free, always soft)
- Identity verification for utility services, leases, etc.
Hard pull scenarios
- Formal loan applications when you've accepted a specific offer
- Credit card applications you initiate
- Auto loan applications
- Mortgage applications
- Apartment rental applications (in some states)
- Some commercial leasing deals
How much does a hard pull actually hurt your score?
This is where most online advice is exaggerated. The reality:
- A single hard pull lowers your FICO by 5 points or less for most people. Borrowers with limited credit history (thin files) may see a larger drop — up to 10 points. Borrowers with very strong credit may see almost no impact at all.
- The score impact fades quickly. Within 3 months it's usually negligible. Within 12 months it's gone entirely from scoring calculations — though the inquiry remains visible for the full 24 months.
- Inquiries are only ~10% of your FICO score. Payment history (35%) and credit utilization (30%) dwarf inquiries. A single hard pull is rarely the difference between approval and denial.
The rate-shopping window
FICO knows people shop around for mortgages, auto loans, and student loans. To avoid penalizing rate-shoppers, multiple hard pulls of the same loan type within a 14–45 day window (depending on the FICO version) are counted as a single inquiry.
This is helpful for consumer loans. For business loans, the rate-shopping window protection is less reliable — different lenders pull different bureaus and code inquiries differently. The best practice is to do all your rate shopping through a single broker who uses soft pulls during pre-qual, then hard-pulls only with the one lender you choose to accept.
The right questions to ask any lender or broker before they pull
If anyone is about to pull your credit, ask three questions:
- "Is this a soft pull or a hard pull?" The answer should be specific and immediate. Anyone who hedges or doesn't know is a red flag.
- "Will this show up on the version of my credit report that other lenders see?" If yes, it's a hard pull regardless of what they call it.
- "What's your written consent / authorization look like?" Hard pulls require written or electronic authorization. If they don't have a paper trail, they shouldn't be pulling your credit.
Red flag: Any broker or lender who pulls your credit without your explicit consent is violating the Fair Credit Reporting Act (FCRA). You can dispute unauthorized hard inquiries with the credit bureau — and if a pattern emerges, file a complaint with the CFPB.
How The Broker Shop handles credit pulls
Our process is built around protecting your credit:
- Pre-qualification = soft pull only. When you complete our 2-minute application, we run a soft credit check. Zero impact on your score.
- Lender shopping = no additional pulls. We submit your file with the soft-pull data to our network of 50+ competing lenders. They review and return offers without any additional credit pulls.
- Only the lender you choose runs a hard pull. Once you've selected the best offer and decide to move forward, that single lender runs a hard pull as part of finalizing the deal.
- No surprises. You'll know exactly when a hard pull is going to happen and you'll authorize it in writing first.
The result: most clients shop dozens of offers and end the process with one hard pull on their report — the lender they actually chose to fund with. Some clients walk away without ever triggering a hard pull at all.
What about business credit?
Business credit (your company's score from Dun & Bradstreet, Experian Business, or FICO SBSS) works similarly but with looser rules. Most business credit pulls are soft, and even hard business credit pulls don't affect personal FICO. However, if a lender personally guarantees a loan to you (which most small business loans require), they will typically pull both your business and personal credit.
For business owners, the practical takeaway is: focus protection efforts on your personal FICO, since that's what nearly every small business lender weighs most heavily anyway.
Frequently asked questions
Does a soft credit pull affect my credit score?
No. A soft credit pull has zero impact on your credit score. It is not visible to other lenders on your credit report. You can have unlimited soft pulls without any negative effect.
How much does a hard credit pull lower my score?
A single hard pull typically lowers a FICO score by 5 to 10 points, and the impact fades within a few months. Multiple hard pulls for the same type of credit within a 30-day window are usually counted as one for scoring purposes.
Can a lender do a hard pull without my permission?
No. A lender must have your written or electronic authorization to run a hard credit pull. Reputable lenders will explicitly state in the application whether they are running a soft or hard pull and get your consent first.
Does pre-qualifying for a business loan affect my credit?
Not if it's done correctly. A legitimate pre-qualification uses a soft credit pull, which has zero credit impact. The Broker Shop uses only soft pulls during pre-qualification — your score is not touched until you formally accept a specific lender's offer.
How long do hard inquiries stay on my credit report?
Hard inquiries stay on your credit report for 24 months but only affect your FICO score for the first 12 months. After 12 months, they remain visible but do not impact scoring calculations.
If I get pre-qualified through The Broker Shop, will I see an inquiry on my report?
You may see a soft inquiry when you check your own credit report (because you can see soft pulls on your personal copy). Other lenders cannot see it, and it has no effect on your score.
What if I get hard pulls from multiple business lenders?
Multiple hard pulls for the same type of credit within a short window (typically 14–45 days) are often counted as one for scoring purposes — but the rate-shopping window is less reliable for business loans than for mortgages or auto loans. The cleanest approach is to shop through a single broker using soft pulls, then accept only one final offer that triggers a single hard pull.
The bottom line
The fastest way to keep your credit clean while shopping for small business funding is simple: do all your shopping with soft pulls, and only allow a hard pull when you've decided to accept a specific offer.
Any broker who can't or won't pre-qualify you with a soft pull is operating in an outdated way. The technology exists, the data is reliable, and the better lenders in the market all accept soft-pull files for decisioning. There's no good reason to take a credit hit just to see what's available.
If you're ready to see what you qualify for without touching your credit, you can pre-qualify with The Broker Shop in about 2 minutes. It's a soft pull. The only person who will ever see the inquiry is you.
Related: Glossary entry: Credit Pull · FICO · State commercial finance disclosure guide