Will a credit report lower my score?

[Unregistered]

I was told that you need to pull my personal credit report. I am concerned that it will lower my credit score.

[Surety Guy]

Our agency uses soft credit reports, meaning we do not show up and we do not lower your score.

However, the sureties we represent may or may not have an impact on your score. Each surety uses a different system, but we always try to encourage the sureties to use our in-house reports to not effect your credit. We also always make sure to send your application only to the appropriate sureties for your specific application, this helps to reduce credit pulls.

[mrbond]

From what I have been told by a major credit bureau, ALL insurance company inquiries are considered "soft" and do not affect credit scores. If a company requests your creidt report directly form one of the 3 major bureaus, it may show up on your report, but it will not be counted against your score as it is considered "soft". If they use a reseller such as ChoicePoint, it will not show up at all.

[Hamburglar]

So what is the difference between a soft credit report and what I'm assuming is a hard credit report?

[Admin]

Good question. The credit bureaus allow insurance related business make use of "soft credit" reports, which does not count as an inquiry and will not effect the score. A "hard credit" report counts as an inquiry and can lower a credit score.

You will want to review the following article for more information on soft credit reports: Are Too Many Credit Inquiries Increasing Your Bond Premium?

[Hamburglar]

So if the hard credit report actually affects your credit rating/score, why do they even use that type of process? It just makes no sense to me.

[Admin]

Certain businesses are not permitted to use soft credit reports (ie applying for a credit card). The thought process behind it is that if you are shopping for credit you are often in a desperate situation and are considered a higher risk, thus a lowered score.

Other businesses simply do not know about soft credit reports. So do your self a favor when shopping for a a surety bond, find out how many credit pulls they will create total, and how many of them will be "soft" or "hard" credit reports.