When homeowners consider financing a home improvement project, one of their biggest concerns is how it will affect their credit score. Many customers hesitate to apply for financing simply because they fear that a credit check could lower their score—even if they ultimately decide not to move forward.
As a contractor offering financing, it’s important to understand the difference between a soft pull and a hard pull credit check. While a hard pull can impact a customer’s credit score, a soft pull provides a risk-free way for homeowners to check their financing eligibility without any negative consequences.
By leveraging a financing platform that uses soft pulls for pre-qualification, you can help your customers explore payment options confidently—leading to more approvals, higher-value projects, and increased sales for your business.
In this installment of our Financing Fundamentals series, we’ll explain what a soft pull is, how it differs from a hard pull, and why it’s a key feature for contractors looking to grow their business with financing.
Soft Pull vs. Hard Pull: What’s the Difference?
A soft pull, also known as a soft credit inquiry, is a way to check a customer’s credit without impacting their credit score. It provides a snapshot of a person’s creditworthiness, allowing lenders to assess financing eligibility without triggering a formal credit inquiry.
Soft pulls are commonly used for:
- Pre-approvals for financing or credit cards
- Background credit checks by employers or landlords
- Personal credit monitoring services
Unlike hard pulls, which appear on a credit report and may lower a customer’s credit score, soft pulls do not affect credit scores—making them a low-risk way for customers to explore financing options.
| Feature | Soft Pull | Hard Pull |
| Impact on Credit Score | No impact | May slightly lower score |
| Purpose | Pre-approvals, background checks, personal monitoring | Formal loan applications, mortgage approvals, credit card applications |
| Customer Consent Needed? | No (in most cases) | Yes |
| Appears on Credit Report? | No | Yes (visible to lenders) |
| Used for Contractor Financing? | Yes, to check eligibility before applying | No, unless the customer proceeds with full loan approval |
A hard pull (or hard credit inquiry) happens when a lender performs a full credit check as part of a final loan approval process. This inquiry appears on the customer’s credit report and may lower their score by a few points, especially if multiple hard pulls occur in a short period.
Since soft pulls do not impact credit scores, they’re a risk-free way for customers to explore financing options—which is why they’re so valuable for contractors offering financing.
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Why Soft Pulls Matter for Contractors Offering Financing
Offering financing is one of the most effective ways for contractors to increase sales, secure higher-value projects, and provide customers with flexible payment options. However, many homeowners hesitate when they hear the words “credit check” because they worry about its impact on their credit score.
This is where soft pulls become a game-changer. By leveraging a financing platform that only requires a soft credit inquiry for pre-qualification, contractors can eliminate a major barrier to financing, making it easier for customers to say “yes” to their projects.
Here’s why soft pulls matter and how they can help contractors close more deals, increase customer trust, and grow their business.
1. Soft Pulls Make Financing More Accessible
Customers often delay or avoid financing because they fear it will hurt their credit score. Since soft pulls don’t impact credit, they allow customers to explore financing options risk-free.
For contractors, this means more potential clients willing to check their financing eligibility, leading to more pre-approved customers and higher chances of closing deals.
👉 The result? More approved projects, fewer objections, and an increase in overall sales volume.
2. Soft Pulls Reduce Customer Hesitation
One of the biggest challenges contractors face is price objections. When a homeowner sees a high project cost, they may hesitate or delay making a decision.
With a soft pull financing option, contractors can immediately reassure customers that they can check their eligibility without any consequences. This removes the fear of financial commitment and encourages customers to at least explore their payment options.
Example: A customer is considering a $15,000 home renovation but worries about affordability. Instead of immediately rejecting the idea, they complete a soft pull credit check and realize they qualify for an easy low monthly payment plan. Suddenly, the project becomes achievable, and they move forward with the contractor.
👉 The result? Fewer stalled projects, fewer lost leads, and more conversions.
3. Soft Pulls Increase Approvals and Sales
With a soft pull process, more homeowners are willing to explore financing, leading to a higher number of pre-qualified applicants. This increases the number of customers who move forward with financed projects, boosting sales for contractors.
Why this matters:
- Many customers assume they won’t qualify for financing and never apply.
- A soft pull allows them to check eligibility instantly, often resulting in more approvals than they expected.
- More approvals mean more financing agreements, which directly lead to more completed projects.
👉 The result? Contractors secure more business by making financing an easy, no-risk option for customers.
4. Soft Pulls Enhance Customer Trust & Confidence
Trust is a key factor when closing a deal. Customers want to feel safe and informed about their financial decisions. Offering a financing option that uses soft pulls builds credibility and helps homeowners feel confident that they aren’t committing to anything prematurely.
How this builds trust:
- Customers don’t feel pressured into a financial decision.
- They can check eligibility on their own terms.
- They see real financing options without the fear of credit damage.
- It reassures them that financing is a transparent, safe, and customer-friendly option.
👉 The result? Customers who trust the financing process are more likely to proceed with the project, helping contractors close more deals with ease.
5. Soft Pulls Create a Competitive Advantage
Not all contractors offer financing, and even fewer offer financing with soft pull pre-qualification. This means that contractors who provide risk-free financing options stand out in a competitive market.
How soft pull financing gives contractors an edge:
- You win more bids by offering financing when competitors don’t.
- You convert more customers by removing credit score concerns.
- You attract higher-value projects by making financing easy and accessible.
👉 The result? More customers choose your business because you provide a seamless, no-risk financing experience.
The Bottom Line: Soft Pulls Make Financing a Win-Win
Soft pulls are a game-changer for contractors offering financing. They remove barriers for customers, making it easier for them to explore financing options without fear of credit score damage. By choosing a financing platform that uses soft pulls for pre-qualification, you can boost customer confidence, increase sales, and offer a seamless financing experience.
Hearth makes it easy for contractors to offer risk-free pre-qualification—helping you close more deals without added complexity.
Contact us today to learn more about how financing can boost your business!
