Soft credit searches vs Hard credit searches

Estimated reading time – 4 minutes

Applying for credit, or just making an enquiry about credit, will involve a credit search. When credit searches are made, these will either be hard credit searches or soft credit searches. But what are the differences between the two?

Soft credit searches - if shopping around for deals that need credit, such as using comparison websites, a soft credit search is unlikely to have any effect on your credit score. Soft credit searches are often based on information you supply for lenders to work out if you’re eligible for credit. You can make a soft credit check for car finance, personal loans or mortgages if comparing the best deal, for example.

Hard credit searches - if you're making an application to a company for credit, and signing up to a credit agreement, they may look for more information from your credit report. This is known as a hard credit search. A hard credit search can gather more information from your financial history. This allows a company to see if there are markers on your credit report such as continued late payments, defaults or County Court Judgements(CCJ). Third parties cannot perform a hard credit search on you without your permission. 

Can credit searches affect your credit score?

If you apply for credit from a company, they may require more information about you, and perform a hard credit search. All hard searches will appear on your credit report and if too many are made in a short period of time, it may affect your credit score. Conversely, soft credit searches won’t affect your credit score.

What kinds of companies do credit searches?

There are many different organisations that can see your credit report. Some of these include financial services such as banks, as well as other lenders and creditors. Other businesses who can perform a credit search include utility and mobile phone providers, insurance companies and debt collection agencies. Unless your permission is granted for a hard credit search, these are most likely to be soft searches. These organisations get their credit reports from credit reference agencies. 

How to get your credit score

It’s not just businesses and organisations that can use credit reference agencies to make credit checks. You can also check your credit information using a credit reference agency too. Equifax Report & Score allows you to see your credit score and also enabled you to see which areas need attention using the easy to follow traffic light system.

This article was written on 1st  March 2022; all information was correct at the time of writing. Visit our Knowledge Centre for more on loans and credit.