Before I process an application for commercial credit i am often asked whether I do a 'hard' credit pull or a 'soft' credit pull. We all know that a hard pull show as an inquiry on your credit report while a soft one does not, but it is commonly misunderstood why one is done over the other or vice versa.

What is a hard credit pull?

When you apply for a new credit card, mortgage, or other type of loan, the lender will do a hard pull on your credit. This means they will access your full credit report for the purpose of making a lending decision.

In previous newsletters, I have written about the myths about what affects and does not affect your personal credit score. Although there are a number of things that a lender will look at before offering commercial financing, a credit score very much will play a big part in their decision for approval and rates. All lenders have thresh holds with credit score if you are anything below a 750. Most commercial buyers are between 550 - 700 so the difference in rate from 600 to 650 can mean a number of more lenders willing to compete for your business. You may be surprised how you can raise your score by just paying attention to a few small details and getting the "myths" out of your mind.