Soft Search vs Hard Search Credit Check

Hannah Scott, Head of Structured Lending, Tuesday, 03 November 2020
Updated: Tuesday, 2 January 2024

If you’re currently looking at applying for finance, you may have seen the words ‘hard credit check’ and ‘soft credit check’, but you might not know exactly what that means. There are several key differences, and they affect your credit report differently, so it’s important that you understand the difference.

Throughout this article, you will see ‘hard credit check’ also referred to as a ‘hard credit search’. These are two words for the same thing. You might also have heard a ‘soft credit check’ called a ‘soft credit search’, this too means the same thing.

In this guide:

What is a credit check?

A credit check is when a company looks at the information held on you to understand your financial behaviour. This will be compiled into what is known as a ‘credit report’.

Companies will only look at your credit report if they have a legitimate reason to do so. An example might be because you’ve just applied for a loan, and they need to do a credit check so they can move forward with your application. Find out what checks are done for car finance with help from our guide.

If you’re currently looking at applying for finance, you may have seen the words ‘hard credit check’ and ‘soft credit check’, but you might not know exactly what that means. There are several key differences, and they affect your credit report differently, so it’s important that you understand the difference.

Throughout this article, you will see ‘hard credit check’ also referred to as a ‘hard credit search’. These are two words for the same thing. You might also have heard a ‘soft credit check’ called a ‘soft credit search’, this too means the same thing.

In this guide:

What is a credit check?

A credit check is when a company looks at the information held on you to understand your financial behaviour. This will be compiled into what is known as a ‘credit report’.

Companies will only look at your credit report if they have a legitimate reason to do so. An example might be because you’ve just applied for a loan, and they need to do a credit check so they can move forward with your application. Find out what checks are done for car finance with help from our guide.

What does a credit check show?

A credit check will show all types of credit accounts you’ve had, your payment history and other information like credit limits within the last six years.

Lenders can also look at the credit reports of someone you are financially associated with, so for example, anyone you have a joint bank account or mortgage with.

Who can perform a credit check?

Below you can find an example of companies that may perform a credit search on you:

  • Banks and building societies
  • Credit providers
  • Utility suppliers (e.g. gas, water, and electricity)
  • Letting agencies and landlords
  • Mobile phone companies
  • Employers (although they won’t see your full report)
Writing in a diary

What does a credit check show?

A credit check will show all types of credit accounts you’ve had, your payment history and other information like credit limits within the last six years.

Lenders can also look at the credit reports of someone you are financially associated with, so for example, anyone you have a joint bank account or mortgage with.

Writing in a diary

Who can perform a credit check?

Below you can find an example of companies that may perform a credit search on you:

  • Banks and building societies
  • Credit providers
  • Utility suppliers (e.g. gas, water, and electricity)
  • Letting agencies and landlords
  • Mobile phone companies
  • Employers (although they won’t see your full report)

Why do lenders perform credit checks?

Some of the reasons lenders conduct a credit such might be to:

  • See if you’ve been paying your credit back on time
  • See how much credit you have and how you’re managing it
  • Check your address and identity

A credit check helps a lender understand your eligibility for finance. This includes whether finance would be affordable to you, and if you have good or bad credit.

What is a soft credit check?

A soft credit check is an initial look to ascertain information on your credit report. Companies perform soft searches to decide how successful your application would be without conducting a hard search on your credit report.

Why do lenders perform credit checks?

Some of the reasons lenders conduct a credit such might be to:

  • See if you’ve been paying your credit back on time
  • See how much credit you have and how you’re managing it
  • Check your address and identity

A credit check helps a lender understand your eligibility for finance. This includes whether finance would be affordable to you, and if you have good or bad credit.

What is a soft credit check?

A soft credit check is an initial look to ascertain information on your credit report. Companies perform soft searches to decide how successful your application would be without conducting a hard search on your credit report.

What does a soft credit check show?

A soft credit check consists of all the information you can see when looking up your own credit score. It’s simply a snapshot of your credit history.

A soft search will likely include:

  • Your name, address, and date of birth
  • Any open or closed bank accounts, loans or credit card accounts, or any outstanding debts in your name
  • Information about your credit payment history, including any late or missed payments
  • Information about anyone you’re financially linked to. For example, a partner or spouse, if you share credit
  • Public records of information such as CCJs, IVAs or bankruptcies within the past six years

Hard searches, on the other hand, provide potential lenders with a much deeper insight into your credit history.

A note in a book reminding to check your credit report

What does a soft credit check show?

A soft credit check consists of all the information you can see when looking up your own credit score. It’s simply a snapshot of your credit history.

A soft search will likely include:

  • Your name, address, and date of birth
  • Any open or closed bank accounts, loans or credit card accounts, or any outstanding debts in your name
  • Information about your credit payment history, including any late or missed payments
  • Information about anyone you’re financially linked to. For example, a partner or spouse, if you share credit
  • Public records of information such as CCJs, IVAs or bankruptcies within the past six years

Hard searches, on the other hand, provide potential lenders with a much deeper insight into your credit history.

A note in a book reminding to check your credit report

Does a soft credit check show on your credit report?

A soft credit check will not appear on your credit report to anyone other than you but allows companies to see your eligibility for credit. This is why you can have as many soft searches on your credit report as you like without affecting your credit score.

Does a soft search affect your credit score?

A soft credit search won’t impact your credit score as it doesn’t appear on your credit report to anyone apart from you. You’re not formally applying for any form of credit, so your credit score won’t take a hit.

Lenders complete soft credit searches frequently, usually to identify who pre-qualifies for finance or a loan. If you look at your credit report on a website like Credit Karma or ClearScore, you’re likely to see lots of soft searches, and none will have an impact on your credit score.

An example of this would be when you get a quote from us for car finance. You can fill in your information, click ‘apply,’ and, in most cases, find out almost instantly how much finance you could get, all from a soft credit check on your file.

Representative 30.7% APR.

If, after that point, you then decide to continue with your application, then a hard credit check would be done. This is not the same for every lender, and some will do a hard credit check on you straight away, so please check with them before applying.

What is a hard credit check?

A hard credit check happens when a company makes a complete search of your credit report. Each hard check is recorded on your report, so any company searching will be able to see that you’ve applied for credit.

A hard credit check will often be done after a soft credit check, once you agree to commit to a financial product. However, some companies may do a hard credit check at the point of application, so make sure to do your own research before applying.

Most hard searches usually stay on your credit report for 12 months, although there are some exceptions to this rule. For example, a debt collection search might stay on your report for up to two years, and an IVA, CCJ, or bankruptcy will leave a mark on your credit file for six years.

Hard credit checks can be carried out for lots of reasons, but the most common reasons tend to be when you:

  • Apply for a loan, credit card, or mortgage
  • Open a new utility account
  • Apply for vehicle finance (some lenders use a hard check at the point of application)

If you are ever not sure whether a soft or hard check will be done, you could ask the provider before applying.

Why does a hard search affect your credit score?

Simply put, a hard search signifies that you have applied for credit and shows other lenders that you might be a financial risk to lend to. Applying for too much credit in a short space of time shows that you might not be able to afford the repayments, which can leave you with a bad credit score.

It’s important to understand that it isn’t just a hard search that can affect your credit score. It can be several things, including whether you are on the electoral roll or even something as simple as if you’ve moved address several times in the last couple of years.

One hard credit check shouldn’t have too much of an impact on your credit score, especially if you are borrowing responsibly and you know you can keep up the repayments.

However, having several hard credit checks appear in quick succession can affect your credit score and may reduce your ability to get approved for credit in the short term. For more information, we’ve written a guide on what affects your credit score.

If your credit score is low and you have a lot of hard credit checks on your credit report, then lenders might offer you a higher interest rate if you are approved for credit.

At Moneybarn, we will only ever perform a hard credit check on your credit file once you’ve found a vehicle you like and are ready to proceed with the finance agreement. At this point, we will generate the documents needed to continue with your agreement, and this is when we will perform the hard credit search on your file.

The difference between a hard and soft credit check

Hopefully, by now, you are more aware of the difference between a hard and soft credit check. But to sum up:

  • Soft credit check: you can have as many of these on your credit file as you’d like. Soft searches don’t affect your credit score, and only you can see these on your credit report.
  • Hard credit check: a hard credit check may impact your credit score slightly and will only show on your credit report for 12 months. Multiple hard credit checks could make you appear as a higher risk. A lower credit score might make it harder to get credit, or you could be offered a higher APR.

Always do your research before you take out credit, and make sure you understand if you have good or bad credit. Before applying, see if there’s an affordability calculator on the lender’s website. This can help you understand what you could borrow based on your current circumstances.

If you’re looking for car finance, our car finance calculator will show you what your finance agreement could look like.

How to check your credit score

There are three credit reference agencies that will provide credit checks to a variety of different organisations, and they all have websites where you can check your credit score and your credit report: 

  • Experian: the most used credit reference agency. You can check your credit score on the Experian website. With the free version, you can check your report once a month, but if you’d like to know more about your report and be given advice on how to build your credit, you will need to sign up for a CreditExpert account. Money Saving Expert’s Credit Club might be a good free alternative.
  • Equifax: the second biggest credit reference agency in the UK. You can check your Equifax report directly with Equifax, or through a service offered by a different company called ClearScore. ClearScore is completely free and tells you when changes are made to your report throughout the month, as well as giving you free advice on how to better your score.
  • TransUnion: you can check your report with them by using the TransUnion website or by using Credit Karma. As TransUnion is not as widely used by lenders to check your report, its service isn’t quite as comprehensive as the others. You can, however, check your credit score for free, so it’s worth checking their report.

These different credit reference agencies are designed to help you understand if you have bad credit, so you can use them to help you get a better score.

To learn more about credit, our guides should be able to help: 

FAQs about credit checks

A hard credit search will generally stay on your credit report for around 12 months, according to Equifax.

A soft credit search will only be seen by you on your credit report, and not by third parties such as finance companies.

Checking your own report does not affect your credit score. It’s only hard credit checks that may affect your credit score, and these can only be done by companies and not by you.

You can check your credit score and report as many times as you like. Your credit score will only get updated monthly, but some reports will show you if something has been added or changed before the month is up.

It is only hard credit checks that may impact your credit score. This is because when you take out credit it reduces the amount you can afford. This signals to lenders that you could be in financial difficulty and that you may be relying on borrowing money.

Hard checks are normal, and most people will take out finance or a loan at some point in their life. It is the number of times that a hard check is done on your credit report that you need to be careful with. A hard check will stay on your file for 12 months, but if you keep the hard checks to a minimum, then a hard check could affect your score less.

There is no exact number of hard credit searches that are too many. Every lender is different, and it’s important to only apply for finance that you have researched and that you know you need so that you don’t damage your credit score.

When a lender does a credit check, they will request certain information on you. They will only do this if they have a legitimate reason to do so, and what they receive back will help them decide how responsible it is for them to lend to you.

They check how responsible it would be to lend to someone by looking at things such as:

  • Your credit score
  • How much credit you currently have
  • How regularly you make repayments
  • If you’re on the electoral roll
  • Whether you have moved address in the last few years

Soft searches do not affect your credit score and aren’t visible to potential lenders. They will only be visible to you and will remain on your credit report for around 12-24 months, depending on the type of soft search.

A soft search will include forms of publicly available information, including CCJs (county Court Judgment). Other information from a soft search could include IVAs (Individual Voluntary Arrangement) or if you’ve declared bankruptcy in the last six years.

Soft searches are often initiated by others, for example, a lender checking whether you pre-qualify for finance. Soft credit searches will also show up on your report when you check your own credit report on websites like Experian.

These soft searches are only visible to you, so you won’t need to worry about potential lenders seeing soft searches on your credit report.

Does a soft credit check show on your credit report?

A soft credit check will not appear on your credit report to anyone other than you but allows companies to see your eligibility for credit. This is why you can have as many soft searches on your credit report as you like without affecting your credit score.

Does a soft search affect your credit score?

A soft credit search won’t impact your credit score as it doesn’t appear on your credit report to anyone apart from you. You’re not formally applying for any form of credit, so your credit score won’t take a hit.

Lenders complete soft credit searches frequently, usually to identify who pre-qualifies for finance or a loan. If you look at your credit report on a website like Credit Karma or ClearScore, you’re likely to see lots of soft searches, and none will have an impact on your credit score.

An example of this would be when you get a quote from us for car finance. You can fill in your information, click ‘apply,’ and, in most cases, find out almost instantly how much finance you could get, all from a soft credit check on your file.

Representative 30.7% APR.

If, after that point, you then decide to continue with your application, then a hard credit check would be done. This is not the same for every lender, and some will do a hard credit check on you straight away, so please check with them before applying.

What is a hard credit check?

A hard credit check happens when a company makes a complete search of your credit report. Each hard check is recorded on your report, so any company searching will be able to see that you’ve applied for credit.

A hard credit check will often be done after a soft credit check, once you agree to commit to a financial product. However, some companies may do a hard credit check at the point of application, so make sure to do your own research before applying.

Most hard searches usually stay on your credit report for 12 months, although there are some exceptions to this rule. For example, a debt collection search might stay on your report for up to two years, and an IVA, CCJ, or bankruptcy will leave a mark on your credit file for six years.

Hard credit checks can be carried out for lots of reasons, but the most common reasons tend to be when you:

  • Apply for a loan, credit card, or mortgage
  • Open a new utility account
  • Apply for vehicle finance (some lenders use a hard check at the point of application)

If you are ever not sure whether a soft or hard check will be done, you could ask the provider before applying.

Why does a hard search affect your credit score?

Simply put, a hard search signifies that you have applied for credit and shows other lenders that you might be a financial risk to lend to. Applying for too much credit in a short space of time shows that you might not be able to afford the repayments, which can leave you with a bad credit score.

It’s important to understand that it isn’t just a hard search that can affect your credit score. It can be several things, including whether you are on the electoral roll or even something as simple as if you’ve moved address several times in the last couple of years.

One hard credit check shouldn’t have too much of an impact on your credit score, especially if you are borrowing responsibly and you know you can keep up the repayments.

However, having several hard credit checks appear in quick succession can affect your credit score and may reduce your ability to get approved for credit in the short term. For more information, we’ve written a guide on what affects your credit score.

If your credit score is low and you have a lot of hard credit checks on your credit report, then lenders might offer you a higher interest rate if you are approved for credit.

At Moneybarn, we will only ever perform a hard credit check on your credit file once you’ve found a vehicle you like and are ready to proceed with the finance agreement. At this point, we will generate the documents needed to continue with your agreement, and this is when we will perform the hard credit search on your file.

The difference between a hard and soft credit check

Hopefully, by now, you are more aware of the difference between a hard and soft credit check. But to sum up:

  • Soft credit check: you can have as many of these on your credit file as you’d like. Soft searches don’t affect your credit score, and only you can see these on your credit report.
  • Hard credit check: a hard credit check may impact your credit score slightly and will only show on your credit report for 12 months. Multiple hard credit checks could make you appear as a higher risk. A lower credit score might make it harder to get credit, or you could be offered a higher APR.

Always do your research before you take out credit, and make sure you understand if you have good or bad credit. Before applying, see if there’s an affordability calculator on the lender’s website. This can help you understand what you could borrow based on your current circumstances.

If you’re looking for car finance, our car finance calculator will show you what your finance agreement could look like.

How to check your credit score

There are three credit reference agencies that will provide credit checks to a variety of different organisations, and they all have websites where you can check your credit score and your credit report: 

  • Experian: the most used credit reference agency. You can check your credit score on the Experian website. With the free version, you can check your report once a month, but if you’d like to know more about your report and be given advice on how to build your credit, you will need to sign up for a CreditExpert account. Money Saving Expert’s Credit Club might be a good free alternative.
  • Equifax: the second biggest credit reference agency in the UK. You can check your Equifax report directly with Equifax, or through a service offered by a different company called ClearScore. ClearScore is completely free and tells you when changes are made to your report throughout the month, as well as giving you free advice on how to better your score.
  • TransUnion: you can check your report with them by using the TransUnion website or by using Credit Karma. As TransUnion is not as widely used by lenders to check your report, its service isn’t quite as comprehensive as the others. You can, however, check your credit score for free, so it’s worth checking their report.

These different credit reference agencies are designed to help you understand if you have bad credit, so you can use them to help you get a better score.

To learn more about credit, our guides should be able to help: 

FAQs about credit checks

A hard credit search will generally stay on your credit report for around 12 months, according to Equifax.

A soft credit search will only be seen by you on your credit report, and not by third parties such as finance companies.

Checking your own report does not affect your credit score. It’s only hard credit checks that may affect your credit score, and these can only be done by companies and not by you.

You can check your credit score and report as many times as you like. Your credit score will only get updated monthly, but some reports will show you if something has been added or changed before the month is up.

It is only hard credit checks that may impact your credit score. This is because when you take out credit it reduces the amount you can afford. This signals to lenders that you could be in financial difficulty and that you may be relying on borrowing money.

Hard checks are normal, and most people will take out finance or a loan at some point in their life. It is the number of times that a hard check is done on your credit report that you need to be careful with. A hard check will stay on your file for 12 months, but if you keep the hard checks to a minimum, then a hard check could affect your score less.

There is no exact number of hard credit searches that are too many. Every lender is different, and it’s important to only apply for finance that you have researched and that you know you need so that you don’t damage your credit score.

When a lender does a credit check, they will request certain information on you. They will only do this if they have a legitimate reason to do so, and what they receive back will help them decide how responsible it is for them to lend to you.

They check how responsible it would be to lend to someone by looking at things such as:

  • Your credit score
  • How much credit you currently have
  • How regularly you make repayments
  • If you’re on the electoral roll
  • Whether you have moved address in the last few years

Soft searches do not affect your credit score and aren’t visible to potential lenders. They will only be visible to you and will remain on your credit report for around 12-24 months, depending on the type of soft search.

A soft search will include forms of publicly available information, including CCJs (county Court Judgment). Other information from a soft search could include IVAs (Individual Voluntary Arrangement) or if you’ve declared bankruptcy in the last six years.

Soft searches are often initiated by others, for example, a lender checking whether you pre-qualify for finance. Soft credit searches will also show up on your report when you check your own credit report on websites like Experian.

These soft searches are only visible to you, so you won’t need to worry about potential lenders seeing soft searches on your credit report.

 
Hannah Scott, Head of Structured Lending
Bringing you guides that simplify the complex world of credit.
Share