When you apply for a loan or credit, the lender may conduct a credit check to determine your creditworthiness. A soft credit check, also known as a soft inquiry or soft pull, is a credit check that does not affect your credit score.
A soft credit check agreement in principle is a pre-approval process that allows you to check whether you are likely to be accepted for a loan or credit before you apply. This can help you avoid applying for credit products that you are unlikely to be approved for, which can damage your credit score.
When you enter into a soft credit check agreement in principle, the lender will typically ask for some basic personal and financial information, such as your income, employment status, and current debts. They will use this information to conduct a soft credit check, which will give them an idea of your creditworthiness. Based on the results of the soft credit check, the lender will tell you whether you are likely to be approved for credit and, if so, how much you could borrow.
Soft credit check agreements in principle are usually free, and they do not have any impact on your credit score. However, it`s important to note that they are not a guarantee of approval. The lender will still need to conduct a full credit check and assess your application before making a final decision.
Soft credit check agreements in principle can be useful if you are planning to apply for credit in the near future, such as a mortgage or car loan. By knowing in advance whether you are likely to be approved, you can avoid applying for products that are unlikely to be approved, which can save you time and protect your credit score.
Overall, a soft credit check agreement in principle can be a helpful tool if you are looking to apply for credit. It allows you to check your creditworthiness without affecting your credit score, which can help you make more informed decisions about your finances.