Navigating Compliance: Soft Pull vs. Hard Pull Credit Checks Skip to main content

Compliance Obligations Between A Soft Pull vs. Hard Pull

Sensitive data and information is constantly shared across the web each second of every day. Businesses, lenders, and individuals alike can benefit from added compliance obligations and verification procedures to avoid common red flags and fraudulent activity. With the increase in automated online submissions from contracts, social security information, and hard or soft credit pulls, fortifying this process can save thousands of dollars and lost credit for everyone involved.

In 2020, 47% of Americans reported fraudulent activity or financial identity losses totalling $712.4 billion. Identifying this activity has become the mission of companies throughout the world, including Soft Pull Solutions, who develop methods and API integration to detect deceitful applications, stolen identities, and e-verify clients through secured and encrypted outlets. When verifying clients with hard or soft pulls, the importance of properly authenticating information can be the difference between fines, identity theft, and damaged reputations.

Synthetic Identity Fraud

Soft Pull Solutions specializes in detecting fraudulent activity in both soft and hard pulls through numerous factors. Imposters can utilize unused social security numbers or false information to mimic or mirror accounts throughout the world. Without software and data centers to detect this activity, more instances of fraud would plague the web. Failing to recognize a synthetic identity can lead to:

  • Damaged reputation
  • Fines for noncompliance with “Know Your Customer”
  • Account opening and maintenance costs
  • Monetary loss from the unpaid balance
  • Rising collections costs for tracking down fake people
  • Thinner margins
  • Less advantageous rates for customers

With time, money, and reputation at stake for clients, lenders, and businesses, the efficacy of synthetic identity protection should motivate anyone in need of sensitive data protection or top level compliance adherence standards.

Soft Pulls

Businesses and individuals frequently benefit from soft pull reports to determine pre-qualification checks and creditworthiness for various services, products, loans, and assets. The frequency of these checks can provide easier access for the hijacking of less secured information, making the potential for fraud far more likely. This can compromise your own data protection, while also losing valued customers or personal identity encryption. Utilizing secured credit reporting services capable of monitoring these transactions can ensure added protections while meeting regulatory compliance requirements in turn.

The timely convenience of on-the-spot qualification from soft pulls is sometimes just as substantial as hard pulls, allowing lenders and individuals full access to FICO scores from Experian, TransUnion, and Equifax. Ensuring these fast and convenient pulls are secure while meeting compliance requirements is crucial in verifying integrity and upholding your reputation. Added accommodations with soft pulls from compliance regulated companies like Soft Pull Solutions can provide:

  • No impact on consumer credit
  • No social or date of birth required
  • Full credit report
  • Access to all three bureaus
  • Fewer compliance obligations - save costs and headaches

Hard Pulls

The most formal of credit verification procedures, hard pulls will refer to full credit history and integrity throughout the lifetime of your credit for auto loans, credit card applications, student loans, personal loans, and more. With fraudulent activity on the rise, recognizing stolen credit identities while adhering to hard pull compliances can save your credit score and update agencies of corrected information related to your credit.

In the United States, The Fair Credit Reporting Act (FCRA) serves to protect and promote consumer information collected by reporting agencies. According to these protections and compliances, “Companies that provide information to consumer reporting agencies also have specific legal obligations, including the duty to investigate disputed information. In addition, users of the information for credit, insurance, or employment purposes must notify the consumer when an adverse action is taken on the basis of such reports.” Relying on institutions which adhere to these compliance obligations and standards can ensure your hard pulls are protected to the fullest extent of the law, while additionally protecting yourself with accurate credit information and provisions to deter identity theft.

Top Industry Standards

Hard and soft pulls are a complex practice to navigate while considering the legal and compliance based standards required by law. The companies specializing in these practices are becoming increasingly more complex themselves as they strive to deter the threats of fraud and client protections. 

Maintaining these obligations and standards is a daily vow from companies like Soft Pull Solutions who cater such services as Red Flag Review dashboards for clients and lenders. Upon any alerts from the Office of Foreign Assets Control (OFAC) of any duplicate or fraudulent name screening methods, Soft Pull Solutions will proactively notify the necessary management personnel for immediate action. When alerts like these would otherwise go unnoticed from organizations or individuals not using such services, the potential for fraud will increasingly loom over any insecure online data transmissions.

Securing yours and your clients' most sensitive data, as well as ensuring the necessary compliance obligations are being met, can provide the ease of access and peace of mind for both hard and soft pull services. For inquiries on API integration for your website or organization, contact Soft Pull Solutions to enhance your user experiences to the highest standards in the industry.

About the author

Soft Pull Solutions

Back to top