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Hard vs soft credit checks: what's the difference?

A credit check – or credit search – is when a company looks at your credit report to see your financial history.

They may use this information to understand how reliable you are at borrowing and repaying money to determine whether they'll lend to you. 

Your credit report contains things like:

  • your name
  • your address
  • your borrowing history
  • details of anyone you’re linked to financially

If you’re looking to apply for finance, there are two different types of searches which can be carried out on your credit report – a soft credit check and a hard credit check.

What is a soft credit check?

Soft credit checks happen when you check your own credit report, or when a lender checks to see whether you’re eligible for certain products and interest rates. The lender may want a top-level view of your financial history so they can pre-approve any offers, or show you what you could potentially be eligible for.

A soft credit check doesn’t leave a visible footprint on your credit file, but it's recorded. This means no other lenders can see it and it shouldn’t impact your credit score, but you’ll be able to see if anyone has checked your credit history.

If you view your own credit report, this will also come up as a soft credit check. You may find that, in certain industries, employers will want to perform a soft credit check if you’ve recently applied for a job with them. This will depend on the employer.

What is a hard credit check?

If you’ve made an application for finance, whether it’s for a credit card, personal loan, mortgage or another form of lending, the lender will do an in-depth check of your credit report.

What does a hard credit check show?

A hard credit check will look at your financial history so the lender can see your track record of repaying money you've previously borrowed. Any negative marks on your credit report, like overdue payments or debt collection, may stay on your credit report for a number of years.

What's the difference between hard and soft credit checks?

The main difference between the two searches is that a hard credit check leaves a visible footprint on your credit report, which other lenders can see. They’ll also be able to check if you’ve been successful for any credit applications.

Keep in mind, if you apply for finance a number of times within a short space of time it could signal to lenders that you may be struggling to manage your finances and are a risk to lend to. It may also impact your credit score for a period of time.

Tips to help with your credit score

Here are some things you can do to improve your credit score:

  • check your credit report to make sure any information held about you is correct
  • use an eligibility checker when looking for finance – they usually perform soft credit searches to show you what finance, or rates, you’re likely to be approved for
  • speak to a prospective lender to see what kind of search they carry out before you fully apply for finance

See more tips on how to improve your credit score.

What next?

If you’re thinking about applying for finance, it may be worth checking the information the credit reference agencies have about your financial history. There may be a small fee for doing this, but it can be a useful way to ensure all your details are up-to-date and there are no mistakes.

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