Business credit inquiries: Soft pull vs. hard pull explained

Any time you apply for business financing, there's a good chance a credit inquiry is involved. Lenders, card issuers, and vendors use these checks to evaluate risk. Not all credit inquiries work the same way, and the type used can directly impact your credit profile.

A soft pull reviews your credit without affecting your score. A hard pull, on the other hand, is a formal credit check. Some business finance platforms now use alternative methods to assess risk, allowing you to access credit or spend controls without any type of credit check.

For businesses managing growth, the timing and visibility of these pulls matter. Too many hard inquiries in a short span can raise red flags for lenders. In some cases, your personal credit can also be pulled, even if you’re applying on behalf of the company.

What is a credit inquiry?

In business settings, lenders, card issuers, and even vendors use credit inquiries to decide whether to extend credit or approve financing.

When you apply for a loan, a credit line, or a new card, you give permission for a credit check. Credit bureaus log this inquiry and add it to your business or personal credit report.

There are two types of credit inquiries - soft pulls and hard pulls. One gives visibility without affecting your credit score. The other can impact your ability to access credit in the future.

A hard inquiry can reduce your personal credit score by up to 5 points and stay on your report for up to two years. That might not sound like much, but multiple hard pulls in a short window can signal risk to lenders.

How credit pulls work for business credit applications

Credit pulls usually start when someone on your finance team applies for a financial product. This can happen during loan applications, card onboarding, or when setting up vendor terms. The lender or provider then triggers the credit check as part of their risk review.

• Step 1: You apply for a financial product. You might be applying for a business loan, a virtual credit card, a line of credit, or vendor terms. The application typically asks for business details like revenue, legal structure, and time in business. Lenders often request personal information, especially if your business is young or doesn’t have established credit.
• Step 2: The lender decides how to check your credit. Once you submit your application, the lender chooses whether to run a soft or hard pull. Most traditional lenders run a hard pull, especially for unsecured credit or high-limit products.
• Step 3: Your credit data is pulled from one or more bureaus. The lender contacts one or more credit bureaus to retrieve your report. For business credit, this might include Dun & Bradstreet, Experian Business, or Equifax. If a personal guarantee is required, the lender may also pull from personal bureaus like TransUnion or Experian. Around 46% of small businesses use personal credit cards, which means most financing decisions include a personal credit check.
• Step 4: The lender reviews your credit profile. Lenders analyze your credit score, open accounts, payment history, credit utilization, and the age of your accounts. They also look at how many recent credit inquiries you have had. Too many hard pulls in a short time can make your business look risky, even if your financials are solid.
• Step 5: You receive a decision and credit terms. If you are approved, the lender uses your credit profile to determine your terms, including the credit limit, interest rate, and repayment conditions. If you are denied, it’s often because of something flagged during the credit review. In either case, the credit pull plays a key role in the final outcome.

If your business is new or lacks an established credit profile, many lenders default on checking your personal credit. Ramp avoids this by evaluating your company’s cash flow and connected bank data instead of pulling credit when offering you a credit card. That means there is no credit inquiry, score impact, and delays caused by underwriting back-and-forth.

What is a soft pull?

Soft pulls are common in pre-approvals, background checks, and vendor onboarding. Some card issuers also use soft pulls to verify your identity or evaluate eligibility before offering terms.

You will not see a soft pull listed under recent activity on your credit report, and lenders will not factor it into credit decisions the same way they do with hard pulls. That’s what makes soft pulls useful for early-stage evaluations.

How soft pulls work

When a company runs a soft pull, it contacts a credit bureau, such as Experian, TransUnion, or Equifax, and requests a summary view of your credit file. This summary includes basic identity information, a credit score range, and a high-level view of your credit accounts.

Unlike a hard pull, a soft pull does not request full details like account balances, credit limits, or recent inquiries. It gives just enough data to assess whether you meet minimum criteria. Soft pulls often happen in the background before you formally apply. In many cases, you will not need to give explicit permission.

Soft pulls are only visible to you. They do not show up when a lender reviews your report, and they do not affect your personal or business credit score. This makes them a low-risk way for third parties to verify information or assess basic creditworthiness.

What qualifies as a soft pull

Soft pulls are common, and they happen more often than you think. The majority of soft credit inquiries in the U.S. fall under this category.

• Pre-qualification offers: Lenders often use soft pulls to check if you meet minimum requirements before extending a credit offer. This helps them assess eligibility without requiring a full application or affecting your credit score. Based on this initial check, you might receive these offers for business cards or financing products.
• Vendor onboarding: Some suppliers check your business credit profile before approving net terms or setting credit limits. These soft pulls help vendors reduce risk without burdening your credit.
• Ongoing account reviews: Banks and credit card issuers may periodically review your credit to update your risk profile or adjust your terms. Since you’re not applying for new credit, these checks remain soft inquiries and will not affect your score.
• Identity verification: Financial institutions use soft pulls to verify your identity when opening a new account, adding a signatory, or processing sensitive changes. It is used as a security step.
• Employment and insurance screenings: Employers and insurers sometimes review credit data as part of a background or risk check. These are always soft pulls and do not show up when lenders view your report.

What is a hard pull?

When a hard pull is run, the lender sees detailed information from your credit file, including open accounts, balances, credit limits, credit card payment history, and past inquiries. This level of access helps them determine whether to approve your application and on what terms.

You have to authorize a hard pull. Once it’s completed, it gets recorded on your credit report and becomes visible to other lenders. These inquiries stay on your report for up to two years.

Each hard pull can lower your personal credit score by up to five points. One pull isn’t a big deal. If you rack up multiple hard pulls in a short period, lenders may see that as a sign of financial stress.

Most business card issuers use a hard pull during the application process, often requiring a personal guarantee. Ramp takes a different route. It gives you access to corporate cards with no hard credit inquiry and no personal liability. Your approval is based on business performance and not your personal financial history.

How hard pulls work

A hard pull happens when you submit a credit application and authorize the lender to review your full credit report. This check helps them decide whether to approve your request and on what terms.

Once you apply, the lender contacts a credit bureau, like Experian or TransUnion, and pulls a detailed version of your credit file. This includes your open accounts, balances, payment history, credit limits, account age, and recent inquiries.

The lender uses this data to evaluate your credit risk. They are looking for patterns that show whether you pay on time, carry too much debt, or have recently applied for other credit. Your application may be denied or approved with less favorable terms if anything looks off.

After the hard pull is completed, it’s recorded on your credit report. Other lenders can see it, and credit scoring models factor it in.

If you're applying for business credit and your company doesn't have an established credit profile, the hard pull may target your personal credit. That means your own score and future borrowing options are at risk, even if the funding is for your business.

What triggers a hard pull in business credit scenarios

A hard pull happens when a lender needs to make a credit decision based on your full credit report. These checks are common in business financing when you're taking on debt or asking for more credit.

• Applying for a business loan: Submitting an application for a business loan, whether it's an SBA loan, working capital loan, or equipment loan, usually results in a hard pull. The lender uses your credit report to assess your ability to repay the debt.
• Opening a business line of credit: If you request a revolving business credit line, the bank will likely run a hard inquiry to review your history with credit usage, repayment behavior, and available credit.
• Requesting a credit increase: Asking for a higher credit limit on an existing card or account can trigger a new hard pull. The provider uses this to determine whether your risk profile has changed since your initial approval.
• Signing up for traditional business credit cards: Most credit cards issued by banks or major providers require a hard pull during the application process. If the card includes a personal guarantee, this inquiry may also affect your personal credit score.
• Leasing equipment or commercial property: Landlords and leasing companies often run hard pulls to evaluate whether your business can meet monthly payment obligations on time. This is common with longer-term leases or high-value equipment rentals.

Comparing soft pull vs hard pull

Credit checks are not one-size-fits-all. The type of inquiry a lender uses can shape your access to financing, impact your credit profile, and influence how other lenders see you. That matters, especially when you are applying for multiple products or managing growth.

Using credit pulls strategically

Every credit inquiry tells a story about your business. A soft pull shows you're being evaluated. A hard pull signals you're actively seeking credit. Lenders pay attention to both.

Multiple hard inquiries in a short period can lower your personal credit score and raise red flags. That matters if you’re applying frequently, especially for businesses still leaning on a founder’s personal credit.

If you want to avoid credit checks entirely, Ramp gives you that option. You can access corporate cards with no credit pull, no personal guarantee, and no SSN. Instead of using credit scores, Ramp underwrites your business based on financial health, like a $25K+ cash balance, consistent revenue, and spending behavior. That means faster access to capital, no credit risk, and a clear line between your personal and business finances.