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Published 27 March 2023

What is a Credit Check? Soft vs Hard Checks Explained

When you sign up for anything from a broadband or mobile phone contract to a bank account or mortgage, a credit check allows companies to find out more about how you manage your finances before they decide whether to take you on as a customer. Here’s the lowdown on how credit checks work.

A credit check, or credit search, gives a company access to information about you from your credit report to help them understand how well you manage your finances. Your credit report is a record held by credit reference agencies (CRAs), such as Experian, Equifax and TransUnion, which allows third parties to see key information about you and your credit history over the past six years. 

Banks, lenders, letting agents and utility companies are just some of the organisations that may run a credit check on you.

Credit reports hold details such as the debts you currently have, credit agreements you previously held, and any court actions you may have faced as a result of missing payments.

However, the exact data that a company sees will depend on whether it is a hard or soft credit check.

These checks show different amounts of information and have different effects on your credit score, which we explain below.

What is a soft credit check?

A soft credit check is a basic look at your credit history, which only allows a company to view a limited amount of information. 

These may sometimes be called ‘quotation searches’ or ‘eligibility checkers’ as providers can use them to see if you qualify for credit.

Soft credit checks are likely to happen when:

Some employers may also run a soft check before you start a new job.

What does a soft credit check show?

Anyone running a soft search on your credit file will be able to see:

While checking your own credit history will appear as a soft search on your file, you will be able to see your full credit report with more detailed information.

Do soft searches affect your credit score?

You will be able to see soft searches on your credit history, but any third parties that run a credit check won’t be able to see them. 

Soft credit checks don’t leave a mark on your credit history. As a result, soft credit checks won’t affect your credit score and any credit applications you may make in the future.

Checking your eligibility for credit won’t affect your credit score and can tell you how likely you are to be accepted for the credit you want. This can help to minimise the chances of your application being rejected, and so reduces the number of hard credit checks on your credit file.

» MORE: What affects your credit score?

What is a hard credit check?

A hard credit check is a full search of your credit history. Unlike a soft search, a hard credit check will leave a mark on your credit file. 

Hard credit checks are likely to take place when:

Through this check, providers will be able to see how you have handled credit in the past and if you have made your repayments on time.

They will use this information to work out the level of risk you present and how likely you are to make the necessary payments if they approved your application. Hard credit checks can also help lenders to work out what interest rate to charge.

What does a hard credit check show?

Some of the information a hard credit check can show includes:

Most of your financial information will stay on your credit file for six years.

Bear in mind that, whatever kind of credit check they run, companies won’t be able to view your bank statements, how much you earn and whether you have a criminal record, for example.

A credit check will also reveal your credit score – a number that helps to indicate your creditworthiness to lenders. Each CRA has a different scoring system.

How long do hard searches stay on your credit file?

Hard credit checks will usually stay on your credit file for at least 12 months and will be visible to any company that subsequently runs a credit check.

Too many hard credit checks over a short period of time will affect your credit score and could indicate that you are struggling financially. As a result, you should make sure you space out any applications for credit.

Who can perform a credit check on me?

A variety of third parties can run a credit check on you, but they must have a valid reason to do so. As mentioned earlier, examples of organisations that might run a credit check on you include:

Some of the above will only conduct a soft credit search, so they won’t be able to see all the information on your credit file.

For example, employers and landlords will only be able to see publicly available information, such as your name, address, and if you have any CCJs.

You should always be told if a company is going to run a credit check and some groups, such as landlords and letting agents, need to ask your permission first. 

If you apply for a product in a joint name, on a bank account or mortgage, for example, a credit check will be performed on both parties.

Can I check my own credit score?

Yes, you can check your credit history for free, without affecting your score. 

All three main credit reference agencies allow you to view your credit history and see your score. It’s worth looking at your file with all three agencies as there may be some variations between them, and providers may use different agencies for their checks.

It’s a good idea to check your credit score on a regular basis, especially if you plan to apply for credit in the near future. If necessary, you can then work to improve your credit score and increase your chances of getting accepted for credit at a competitive interest rate.

Checking your credit history also means you can spot any mistakes that may be on file and ask the agency to correct them.

» MORE: How to check your credit score

About the Authors

Peter Adams

Peter reports on a number of areas in the personal finance sector, with a particular interest in supporting businesses and individuals in the UK services industry.

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Rhiannon Philps

Rhiannon has been writing about personal finance for over three years, specialising in energy, motoring, credit cards and lending. After graduating from the University of Cambridge with a degree in…

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