Webull is a financial services company that offers commission-free stock trading. It’s a popular choice for investors who are looking to save on fees, but one of the questions we often get asked is: does using Webull affect your credit score?
Webull does not affect your credit score. Credit scores are determined by a number of factors, including payment history and credit utilization. Webull does not report to the credit bureaus, so it will not impact your credit score.
When you sign up for a Webull account, Webull does a soft inquiry on your credit history. A soft inquiry is when a financial institution checks your credit score to see if you are eligible for certain products or services, but does not affect your credit score.
Hard inquiries are typically when you apply for a new line of credit and can cause your credit score to drop by a few points.
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Credit Check While Opening A New Webull Account
Yes, Webull does check your credit score but not in a stringent way. After you open your brokerage account in Webull, it sends a soft inquiry on your credit score.
This pull does not affect your score because this check is done only as a background check. Your score is not reported to credit bureaus like TransUnion, Experian, and Equifax.
Webull is a public company and would prefer to save itself from fraudsters or credit defaulters. This is important for Webull as well as for other people who use this app.
It sends soft inquiry just to get basic information on your credit history and have proof that you will not misuse the platform for any kind of financial fraud or are not committing any identity theft. You are the one who you are claiming to be.
A soft inquiry is defined as an inquiry that does not affect an individual’s credit score. Soft inquiries can occur when an individual checks their own credit report, when a business checks an individual’s credit report for the purpose of extending a pre-approved offer of credit, or when a creditor checks an individual’s report to review their account status.
Soft inquiries do not have a negative impact on credit scores and are therefore not taken into consideration when calculating an individual’s FICO® Score.
A hard inquiry (or a “hard pull”) is when a credit bureau requests your credit score from one of the three main credit bureaus—Equifax, Experian, or TransUnion. This type of inquiry negatively affects your credit score by indicating that you may be in financial trouble and are looking for new sources of debt.
By doing this background check Webull will get to know about the track of your bill payments and other financial activities.
Webull will not accept your request for a brokerage account if you are found to be defaulting in bill payments, repayment of loans, or are involved in any kind of financial fraud.
Here are certain facts about Webull that you must know before using it as your brokerage app.
- Webull is regulated by reliable financial institutions like SEC and FINRA .
- Webull is a part of NASDAQ and NYSE.
- It provides high security on the assets of its users and is insured by Apex, their Clearing Agency.
- Webull is not FDIC insured.
- Webull is a member of SIPC. All the funds deposited by its users are thus protected (up to $500,000, which includes a $250,000 limit for cash) against the loss of cash and securities held by a customer at a financially-troubled SIPC-member brokerage firm.
- The app is secured against any kind of security breach.
- Webull provides cover against losses in investment and cash losses if a custodian is unable to save the assets of Webull clients. This is applicable even if a company declares bankruptcy or insolvency.
- Webull has a strong customer complaint system and closes the complaints in short durations.
Will Soft Enquiry by Webull Be Harmful to My Credit Score?
To get an answer to this question you need to understand the difference between hard and soft inquiries. If you are applying for a loan or processing a credit, you permit the lender or the company to check your credit report. It is considered stringent and exploratory and it is recorded in your credit history.
Soft credit inquiries also require your authorization like in the case of getting a credit card issued or mortgage. But, it is not recorded in your credit history
A large number of hard inquiries on your credit report in a short period that gets recorded in your credit history will go against your future credit score.
Webull makes only soft inquiries. So, it will not affect your credit score.
How Can I Trade Safely in Webull to Avoid Negative Impact on My Credit Score?
Using a platform like Webull a fact remains that all the investments are always dependent on the stock market swings. No brokerage app, including Webull, can protect your investments from the impact of the downswing in the market.
You can do the following to ensure the safety of your Credit Score.
- Use options to protect your investments.
- Webull does not take any responsibility for your investment decisions and does not refund any losses on your investments. You must understand the risks involved.
- Investments are always risky and you must have a solidly placed emergency fund so that you have enough for sustaining your financial status if your investments go wrong.
- Use Webull’s research, screening, and investing tools to trade financial assets. You must observe Webull reports and charts to analyze the information provided by different companies. Check the technical indicators carefully for identifying the right companies for the best trading opportunities.
Wrapping It Up…
Holding an account in Webull does not affect your credit score at all. It only sends soft inquiries to check our credit status and they do not add up in your credit history. Your credit score remains intact.
The only thing that needs to be done is a detailed study of the advanced charts and multiple technical indicators by Webull, understand the market trends, and then trade in the best options available.