What Documents Do Lenders Often Want When Extending Credit
You need certain documents to get set up to pull credit reports. And often, these can be hard to attain. You also need these whether you are looking to perform soft credit reports or hard credit reports. Fortunately, there are various credit reporting solutions you can use to help build your client base with solid and reliable data. For instance, Soft Pull Solutions can save you time and money using custom APIs for cross-referencing data to be verified through various systems.
Why a Business Would Look at Credit Scores
When you are working with clients and customers buying valuable products, there is often an arrangement to be made that involves brokerage and lending. This helps a client pay for a service or product in installments that they otherwise may not be able to afford outright. This is common in business and personal life. But how do you know a client can pay? Well, a credit report will help you determine if a client meets certain criteria and can reasonably pay you.
Hard credit checks
A hard credit report applies mostly when a client applies for something that directly impacts finances. Good examples would be applying to a lender for a loan or mortgage, a new credit card, or an increase in a line of credit. These are fixed on a credit report and can even negatively affect a person’s credit score for a period of time. Typically, hard credit checks are performed when large sums are involved and are done by banks or lenders, and are visible to other businesses.
Soft credit checks
Soft credit checks have no impact on a credit score or report, although they can contain the same information as a hard credit check. A soft credit report is generated when a specific company wants to assess your suitability for an application. This can be a new tenancy, buying something on credit, or taking out a cell phone plan. There can be many soft credit checks on your credit report. But unlike hard checks, they are visible only to you and not external services.
Get Set Up to Pull Credit with Reliable Solutions
At the forefront of a front-facing business model, the mindset of “customers matter” should always be a consideration. And while you might want to assess a client’s ability to pay you, you also want to make the process as easy as possible. Further, you also want to minimize the impact on a customer. This is where credit pull solutions such as Soft Pull Solutions can help. Using custom analysis methods, these services can assess credit reports and determine the eligibility of applicants all while keeping your customers’ credit files clean.
How a Credit Pull Helps You
Using credit pull solutions is a great way to ensure your customer is not impacted. But what about soft credit pulling from the business side? In the immediate term, a credit check can help you avoid signing up customers that cannot pay. But there are many other advantages, such as:
- Protecting your own cash flow in the long term by finding liquid customers.
- Alerting you to a possible history of fraudulent activity concerning a business.
- Ensuring your business doesn’t suffer because of the mismanagement of another.
- Avoiding the stress of trying to pay your debts because a customer hasn’t paid you.
- Determining custom payment solutions for customers based on a credit report.
A soft check can instantly help you detect any risks that a client may pose to your business. Data often includes their score, suggested credit limits, and any outstanding injunctions and legal notices. But it can also help you assess if a customer is in a good financial position.
The Documents Required
A soft credit check requires certain pieces of data that can be used to make sure the search is accurate and legal. As a business checking on a customer, you don’t need too much information. But there are certain documents that will help you in your credit pulling. Often, a full name and address will suffice, verifying identity helps make the report and data more accurate so as not to confuse one individual or company with another.
Proof of identity
You must verify that an applicant is who they say they are, and the easiest way to do this is to verify their name and identity. When performing a credit check, you will typically need:
- Documents that confirm the full legal names of a person (birth certificate) or entities.
- A government-issued photographic ID such as a passport or driving license.
- A government code such as social security numbers or tax identification numbers.
Any of these are a great first step in verifying who a company or individual is. It also establishes that they have the legal right to credit and business operations within your country of operation.
Proof of address
Another vital piece of data is also a company’s or person’s proof of address or residency, respectively. It is vital to confirm where someone lives or where they operate to remove the chance of fraud and to know where to correspond in accordance with compliance laws. For example, sending copies of credit agreements as well as the terms and conditions for repayment. Utility bills, tax office correspondence, and even insurance letters might be enough.
Building Solid Clientele
Using reputable credit services such as Soft Pull Solutions allows you to build a reliable clientele base. Without credit checking, you are all but blind and would have to make decisions based on a gut feeling. This, of course, isn’t good business. For good business and to make sound decisions, you need reliable data for credit checking, just like any other part of running your company. Or you risk the stress and financial impact of clients who cannot pay you back.
Credit Where Credit is Due
There are various ways to get set up to pull credit based on your needs. Hard and soft pull credit checks alike require reliable solutions such as Soft Pull. This can help you combat fraud, assess any client’s ability to pay, and offer tailored packages based on customer data. You will typically need some form of identification for a business or individual. You will also require proof of address to determine a customer’s eligibility to do business with you, such as tax numbers.
If you would like to benefit from the streamlined convenience of Soft Pull APIs for your business, contact Soft Pull Solutions today to start checking consumers with accuracy and confidence.