A soft search is when someone runs an inquiry on your credit report without having to apply for credit. These can be done by companies as part of a background check, employers verifying your credit, or landlords screening you before they let you live on their property.
The information they see is limited compared to a hard search, but it’s enough for them to decide whether they’ll lend you money or give you credit cards. It’s important to remember, though, that all inquiries will stay on your credit report for two years.
Lenders don’t see your credit score
If you apply for credit, whether it’s a credit card, personal loan, or mortgage, your lender will normally carry out what’s known as a ‘hard’ search. This is a thorough look at your credit history and can include information on past debts, defaults, and county court judgments.
This can give lenders an idea of your current financial situation, so they can decide whether you’re likely to pay them back. This can also help to protect them against any potential fraud or identity theft.
Lenders only have access to your credit report when they are permitted to do so. This is usually when you apply for credit yourself or when you ask a third party such as a bank to do so on your behalf.
However, some lenders, such as Koyo Loans, do conduct soft searches on applicants before making a decision. These checks are recorded on your credit file but won’t affect your credit score.
These can be useful when you’re looking for a new credit card or loan and want to see what types of offers you could be eligible for before putting in an application. They also give you a chance to compare the rates of different cards or loans, so you can make an informed decision before committing to anything.
One thing to bear in mind is that hard credit searches are visible on your credit report for a few months. That’s why it’s important to space out your applications for credit.
If you apply for lots of credit in a short period, it can negatively impact your credit score. This is because it shows that you’re in financial difficulty and are therefore more likely to default on payments or be unable to afford them.
This may lead to you getting rejected when applying for credit or being charged a higher interest rate on a credit card or loan. It can also cause you to miss out on opportunities that are better suited to your circumstances.
The best way to prevent this is to make sure you’re only applying for the things you need. This can be done by using a comparison website such as Comparethemarket, which will show you all of the credit options available to you.
They don’t see your credit history
When you apply for credit, a lender may perform an official credit check (also called a hard search) to look at your credit report. They do this to find out how well you’ve handled credit in the past and whether you’re likely to pay back your money.
These hard searches aren’t a bad thing in and of themselves, but they can have a big impact on your credit score. They can also make it more difficult to obtain the type of credit you want.
Lenders usually do hard credit checks when you apply for a mortgage, a loan, a credit card, or another kind of loan. These will leave a mark on your credit file and will show up in other lenders’ credit searches.
Normally, these hard credit searches will reduce your credit score for a few months and then return to its normal level after you’ve proven you’ve managed your new debt responsibly. However, it’s important to note that if you have a lot of hard credit inquiries from a single lender over a short period, they can eat into your credit score and make it harder to get the credit you need in the future.
You can still apply for credit without having a hard search added to your credit report, but it will take a bit longer. You will need to wait for a credit reference agency to contact you about it, which could take up to two weeks.
Some lenders, such as Koyo Loans, will use soft searches to assess your application, and they won’t impact your credit score. This is because they don’t use Open Banking data to help with their credit checks – instead, they will simply look at your personal and financial details.
A lender will normally use a credit scoring system to calculate your creditworthiness, such as VantageScore or FICO(r). These three-digit numbers are designed to give a snapshot of how well you’ve managed credit in the past and how likely you are to repay your debts.
These soft searches aren’t a bad thing at all, and they won’t have any impact on your credit score. They are typically used when you’re shopping around for a loan, but they aren’t required before you apply.
They don’t see your financial history
When a lender does a soft search, it’s recorded on your credit report but won’t affect your credit score. This is great news if you’re shopping around for a loan or want to build up your credit profile.
A soft search is carried out before you make an application for a loan or any other type of credit, such as a credit card or mortgage. Lenders do this so they can understand your financial history and ensure that you are suitable for their product.
These searches may not impact your credit score, but they can still be a good way to see what is available to people like you with a similar credit rating before you apply. They are also helpful if you’re unsure about what type of credit to apply for and need to shop around.
In addition, a soft search can also be useful for employment screening. Some employers will look at your credit to see if you’re financially responsible or could be a risk for theft and fraud. Examples of this might be lots of late payments or excessive debt.
If you are worried that a lender has carried out a soft search, it is always worth contacting them and asking them to explain what they are doing. You can also raise a dispute if you believe it’s inaccurate or fraudulent.
A soft inquiry (or a soft pull) shows the same information as a hard inquiry, including your lines of credit, loans, payment history, and any collections accounts or tax liens in your name. But these inquiries are not built into credit-scoring models and won’t be visible to potential lenders, only services you monitor yourself (like Credit Karma or Mint). They’re also not shared with any other entities – except insurance companies and debt-settlement companies you authorize to access your report.
They don’t see your employment history
While lenders have been known to do some of the legwork themselves, they still rely on companies like Equifax and Experian to collect data and make it available to them. These firms are responsible for a huge amount of your credit information so it is only natural that they would need to check you out from time to time. They also have to comply with the regulations surrounding this process so you can be sure your information is safe from opportunistic scams.
Having said that, it’s not impossible for you to conduct your own soft or hard search for yourself. There are many tools on the market that can help you get to grips with what your credit history is all about, and a good comparison website can be your best friend in this regard.