Soft Pulls Do Not Create Trigger Leads in the Mortgage Industry

As a mortgage lender, you’re likely familiar with the concept of trigger leads. These are leads generated when a consumer's credit report is pulled, often as part of a mortgage application.

But did you know that soft pulls—those less invasive credit checks—do not trigger these leads?

This is an important distinction that can have a significant impact on your business and how you engage with potential clients. In this article, we’ll explore how soft pulls work, why they’re beneficial, and how they differ from hard pulls that can activate trigger leads.

What Are Trigger Leads?

Trigger leads are created when a credit reporting agency identifies that a consumer has recently had a hard credit inquiry—like when they apply for a mortgage. Other lenders and loan officers are then able to oftentimes get an alert with lead information for that consumer who is now in the market for a mortgage. This allows competitors to market to the consumer in an effort to offer every consumer the best rate possible.

In simple terms, when a consumer applies for a mortgage and authorizes a credit check, the credit bureaus take note. That information can then be distributed to other lenders in the form of trigger leads. This is why, as a consumer, you may find yourself receiving calls or marketing materials from other companies after applying for a loan. (Many consumers can also relate to this experience when they apply for a credit card. All of a sudden they have 3 or 4 different credit card offers sitting in their mailbox from other credit card companies)

Trigger leads are part of the process that allows lenders to identify potential customers who are already in the market for a loan. But while this process may seem efficient for acquiring leads, it can also cause headaches for loan officers and be overwhelming for some consumers. As we’ll explain, soft pulls offer a way to avoid the problems that come with trigger leads.

Why Soft Pulls Are Beneficial for Mortgage Lenders

Soft pulls offer several advantages for mortgage lenders, providing a more streamlined and customer-friendly approach while avoiding the drawbacks of hard pulls and trigger leads.

 Avoid Unwanted Trigger Leads

One of the main advantages of using soft pulls in mortgage lending is that they don’t trigger leads. Since soft pulls don’t create a hard inquiry on a consumer’s credit report, they don’t set off the chain of events that leads to other lenders marketing to those consumers. This allows you to gather the necessary information you need without getting caught up in the unsolicited marketing that often comes with trigger leads.

A Better Customer Experience

Consumers are increasingly sensitive to unsolicited marketing calls and emails. By using soft pulls, you avoid putting your potential clients in the position of being bombarded by other lenders after they’ve inquired about credit.

A soft pull offers a smoother, less invasive process for both you and the consumer. You’re not adding any pressure to the consumer’s decision-making process, and you’re not creating an experience that feels aggressive or invasive.

Cost Savings
Soft pulls are significantly more affordable than hard pulls, often costing about half as much. This makes them a cost-effective solution for lenders looking to streamline their pre-approval processes while keeping expenses in check.

Focus on Qualified Borrowers
Using soft pulls allows you to quickly assess whether a borrower is likely to qualify for a loan before investing more time and resources. This ensures you’re not wasting effort on individuals who won’t meet your lending criteria, helping you focus on the leads that truly matter.

Simplified with Phone Consent
Soft pulls can often be initiated with just verbal consent over the phone, making the process quicker and more convenient for both lenders and borrowers. This flexibility helps you move prospects through the initial stages of the lending process without unnecessary hurdles.

Soft Pulls vs. Hard Pulls

Here’s where the distinction between soft pulls and hard pulls becomes important. A hard pull, which occurs when a consumer applies for a mortgage or other credit, creates a credit inquiry that is recorded on their credit report. This inquiry triggers the creation of a trigger lead, notifying other lenders that the consumer is shopping for loans.

A soft pull, on the other hand, does not affect a consumer’s credit score or create a public inquiry. It’s a less intrusive form of credit check often used by lenders to pre-qualify consumers or check a borrower’s credit without initiating a formal loan application. Because soft pulls don’t generate a hard inquiry, they don’t trigger leads.

This is a key benefit for lenders. When you use soft pulls, you can gather necessary consumer data without activating the chain of events that lead to trigger leads. This means you won’t be generating unwanted marketing outreach for your potential customers, and you can build trust by offering a more low-pressure, customer-friendly experience.

How Trigger Leads Work for Mortgage Lenders

When a consumer applies for credit—whether it’s a mortgage, auto loan, or personal loan—a hard pull on their credit report is initiated. The credit bureaus, which include Equifax, Experian, and TransUnion, track these hard inquiries and use that information to create a list of consumers who may be in the market for additional credit. This is where trigger leads come into play.

Other lenders can then purchase or acquire this data, using it to target consumers who may be in need of a mortgage. These leads typically include the consumer's name, contact details, credit scores, and outstanding balances. The idea is that these consumers, having recently applied for credit, are likely to be open to offers from other lenders and could benefit by receiving the best interest rate and APR.

The problem, however, is that trigger leads can be a double-edged sword. While they provide benefits to some consumers, other applicants dislike the multiple phone calls, emails, and marketing material they start receiving. Companies who are purchasing or acquiring trigger leads obviously love these opportunities, however, it unfortunately can be a big barrier for the original mortgage company who is trying to move the consumer through the loan process.

Can Lenders Still Generate Quality Leads Without Trigger Leads?

The short answer is yes. While trigger leads can be a quick way to generate leads, they are not the only method available to lenders. With soft pulls, you can still access valuable consumer data and use it to pre-qualify leads without initiating a full application process or creating a hard credit inquiry.

You can use soft pulls to assess a potential borrower’s creditworthiness and make informed decisions about whether to extend an offer. This means you can still attract and qualify leads without relying on the more aggressive, potentially intrusive tactics that trigger leads involve. Plus, by not triggering leads, you maintain a better relationship with your clients, improving your reputation in the process.

Compliance and Ethical Considerations

Soft pulls are fully compliant with the Fair Credit Reporting Act (FCRA), just like hard pulls. The FCRA allows for the collection and use of consumer credit data for specific purposes, and soft pulls are no exception. The key difference is that soft pulls do not create a hard inquiry on a consumer’s credit report, which is what activates trigger leads.

Many lenders are increasingly concerned about the implications of using trigger leads, especially with the rise of consumer protection laws. House Bill 7661, also known as the Trigger Leads Abatement Act of 2022, seeks to limit or regulate the sale of trigger leads in the mortgage industry. While the bill is still under consideration, it highlights the growing concerns around the use of these leads. By opting for soft pulls, lenders are taking a more compliant, ethical approach that could serve them well in the long term.

Soft Pulls are the Future for Mortgage Lenders

Using soft pulls in mortgage lending is an effective way to gather consumer data without triggering unwanted leads or marketing efforts. Not only does it allow you to avoid the problems associated with trigger leads, but it also provides a better experience for your clients, improves compliance, and helps build trust.

At Soft Pull Solutions, we specialize in offering credit checks that provide you with the data you need while keeping your business and your clients protected. Reach out today to learn more about how soft pulls can streamline your mortgage lending process and keep you compliant with industry standards—without triggering leads.