Credit checks, also known as credit searches, help companies assess how reliable you are when it comes to borrowing and repaying money. This information if often used to decide whether to lend to you.
Your credit report typically contains:
A soft credit check occurs when you check your own credit report or when a lender checks your eligibility for specific products or interest rates.
A soft credit check provides a top-level view of your financial history. Lenders may perform a soft credit check to pre-approve offers or show you what you could be eligible for.
Soft credit checks don’t leave a visible footprint on your credit file, meaning other lenders won’t see them. However, they are recorded and you can view them on your credit report.
If you check your own credit report, it’ll appear as a soft credit check. Additionally, some employers may perform a soft credit check as part of their hiring process, depending on the role and industry.
A hard credit check is an in-depth review of your credit report. This will happen if you’re applying for finance, such as a credit card, loan or mortgage.
Hard credit checks look at your financial history, allowing lenders to assess your repayment track record.
Any negative marks on your credit report, like overdue payments or debt collection, may stay on your credit report for a number of years.
Soft credit checks don’t impact your credit score and aren't visible to other companies. However, hard checks are visible and can affect your credit score.
Applying for finance multiple times in a short period may signal to lenders that you're struggling financially, which could impact their decision.
