No, LendingTree itself does not perform a hard credit pull; it uses a soft credit inquiry to provide you with personalized rate offers.
When you use LendingTree to compare financial products like personal loans, mortgages, or credit cards, the platform conducts a soft credit inquiry. This process allows LendingTree to review your credit report and present accurate and personalized rate options without affecting your credit score. A soft inquiry is a preliminary check that helps match you with suitable offers based on your credit profile.
Soft vs. Hard Credit Inquiries
Understanding the difference between soft and hard credit inquiries is crucial when navigating financial applications:
Soft Credit Inquiry
- Purpose: Primarily for pre-qualification, background checks, or when you check your own credit score. Companies may also perform a soft inquiry to send you pre-approved offers.
- Credit Score Impact: Does not affect your credit score in any way.
- Visibility: Typically only visible to you and the entity that initiated it; not visible to other lenders.
- Examples: Checking your credit score online, receiving pre-approved credit card offers in the mail, or using comparison sites like LendingTree.
Hard Credit Inquiry
- Purpose: Occurs when you formally apply for new credit, such as a mortgage, auto loan, personal loan, or credit card. It's a more thorough review of your credit history.
- Credit Score Impact: Can temporarily lower your credit score by a few points, though the impact is usually minor and short-lived. Multiple hard inquiries in a short period (especially for different types of credit) can have a more noticeable effect.
- Visibility: Visible to other lenders for up to two years and is part of your credit report.
- Examples: Applying for a new credit card, taking out a car loan, or applying for a home mortgage.
What Happens with Individual Lenders?
While LendingTree uses a soft inquiry, it's important to note that each individual lender or financial institution on the platform has its own policy regarding credit pulls. If you decide to move forward with a specific offer and formally apply for a product, that particular lender will most likely conduct a hard credit inquiry as part of their underwriting process. This hard pull is necessary for them to make a final lending decision.
Practical Insights
- Shop Smart: Using platforms that perform soft inquiries, like LendingTree, is a smart way to compare multiple financial product offers without the initial risk of impacting your credit score. It empowers you to see what you qualify for before committing to a formal application.
- Be Prepared: Always be aware that a formal application for any new line of credit will almost certainly result in a hard inquiry from the specific lender you choose.
- Monitor Your Credit: Regularly monitoring your credit report can help you track all inquiries and understand their potential impact on your credit profile.
