Why Mortgage Brokers Should Be Using Soft Pulls

With the current real estate market, homebuyers are on the lookout for realtors and mortgage brokers who can assist them through the complicated process of buying a new property. They want to know they are working with someone they can trust while providing them with excellent customer service.

As a mortgage broker, you should have a good understanding of the various tools available to assist your customers (realtors and homebuyers) in making the best possible financial decisions. One possible tool is using soft pulls.

What is a soft pull?

Let’s start by defining a soft pull. You may also hear it referred to as a soft credit check or soft credit inquiry. Regardless of the name you use, it is the same thing.
A soft pull allows mortgage brokers, lenders, employers, and other third parties to non-invasively review someone’s credit to prequalify them. It helps companies to better understand a person’s creditworthiness. Soft pulls are frequently used by companies when conducting background checks, monitoring someone’s credit, or determining someone’s pre-approval status.

To request a soft pull, consumers do not need to provide personally identifiable information (PII), such as date of birth or social security number, like they would on a loan application. Instead, information such as their name and address is enough to obtain the required data.

Since soft pulls are not associated with a specific lending decision, such as whether or not to approve a loan application, it does not impact the consumer’s credit score. When a soft pull is done, it does not leave a note of an official review as a hard credit pull would.

At Soft Pull Solutions, we provide an online portal that allows you, as a mortgage broker, to request your customers’ credit information as a soft pull. Our instant and comprehensive reports give you access to information from the three main credit bureaus: Equifax, Experian, and TransUnion.

For more information about soft pulls, hard pulls, and the compliance surrounding both, check out our previous article, “Compliance Obligations Between a Soft Pull vs. Hard Pull.”

What are the benefits of a soft pull for the consumers?

Buying a house is a stressful experience for anyone. Anything you, as a mortgage broker, can do to help alleviate stress for your customers, will incentivize them to continue doing business with you.

Conducting a soft pull is a great way to minimize stress for several reasons. First, it doesn’t lower their credit score as a hard pull would. When a soft pull is done, it is not recorded by FICO or VantageScore. This means that it does not show up as an official review on a consumer’s credit report so it doesn’t negatively impact their score. This is because it is not directly related to a credit application. Risk is not being determined. Instead, a soft pull is looking at their creditworthiness.

Second, helping customers know their creditworthiness upfront saves them time in the long run. If they have a solid understanding of how much they qualify for when buying a house, they can eliminate properties outside their price range from the start. This allows them to focus on those houses that will fit within their prequalified range.

Using a soft pull not only saves time but it also offers peace of mind to your customers. Instead of having to fill out a long credit application where they provide loads of personal details, including their social security number and date of birth, customers only need to provide a few basic details. Most are less reluctant to do this versus handing over their PII.

At Soft Pulls Solutions, we are here to help you in meeting your customers’ needs. Our online portal offers up an instant credit report with access to information from the three credit bureaus.

How can mortgage brokers benefit from using soft pull credit checks?

While it is important for mortgage brokers to know how soft pulls will benefit your customers, it is equally important for you to understand the benefits for yourself. Here are several reasons why we recommend using soft pulls as a mortgage broker.

Saves time and money

We have already discussed how soft pulls can save time for customers. However, this also carries over into saving time for you, as the mortgage broker, and for everyone involved. If your customers know what amount they are pre-qualified for as they start their search, it allows them to focus on the houses in their price range.

This saves them time in searching. But, it also saves mortgage brokers time. Rather than going through the paperwork process for a house that someone doesn’t really qualify for, you can focus on helping those individuals who are ready to commit because they have already been pre-qualified and know what they can afford based on their creditworthiness.

And, as the saying goes, time is money. As you’re able to save time, you are also able to save money. This doesn’t just come from working with customers who are prequalified, it also comes from using soft pulls. Using a service for soft pulls is significantly cheaper than using one for hard pulls. One more way that you’re saving some bucks.

Generate more leads

As with any business that relies on customers, we know that generating more leads generates more revenue for you as a mortgage broker. Using soft pulls can help in your lead generation.

As you develop relationships with realtors in your area, the more services that you can provide along with your great customer service allows you to better help them in obtaining quick financing solutions for their clients.

As mentioned, soft pulls provide several benefits to the realtor and their clients. It saves them time by knowing how much the potential homeowner qualifies for so the property search can be focused on a predetermined price range. Customers are also more likely to want to fill out a prequalification application than a credit application. It takes less time and doesn’t ask for their PII.

Once someone is prequalified, you and the realtor will also be able to speak more specifically to the client’s needs and wants. You’ll be able to answer their financial questions more effectively, providing a less stressful process from the start.

When homebuyers and realtors have their customer service needs met, they are happy. Satisfied clients lead to referrals. As you generate additional leads through referrals, you grow your business and revenue.

Protect your current leads

Once you generate a new lead, it is necessary to protect that lead. Soft pulls can assist.

As we have shared previously, using a soft pull does not leave behind an official notice of inquiry on the consumer’s credit report. Since the soft pull is not recorded on their credit report, it does not activate trigger leads for your competitors to use. This helps you maintain the integrity of your leads while providing your customer with the financial information needed to move forward.

Soft Pull Solutions is a software company that provides many credit report services, including soft pulls, to assist mortgage brokers in meeting their clients’ needs. If you are interested in learning more about the benefits of using soft pulls or want additional information about our services, give us a call or book an appointment.