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What is a Soft Credit Search

posted by Carla on Monday, 11 June 2018

What exactly is a credit check?

Credit check? Soft credit search? Hard credit search? Footprint? Credit reporting? Credit file? Scores?

All of this can be quite confusing if you aren’t aware what is means, and quite daunting too. Here we explain to you what happens when a business or company credit searches you and the differences in each search!

Put simply, a credit check is how a lender assess if you’re a reliable person to lend money to. The lender wants to know whether you can manage your debts. They want to make an informed decision. This then gives an indication as to whether you are likely to run into financial trouble or even default on the debt if they lend you money.

We work with a couple of hand-picked credit partners. This allows you to have the choice and flexibility on how to pay for your course. We often get asked, “What is a soft credit search?” when students opt for monthly instalments. When a lender or creditor asks a credit bureau to look at your credit report, that inquiry may get noted as part of your credit history.

There are two types of inquiries hard and soft. We conduct a soft credit search when you apply for monthly payments.

  • hard inquiry occurs when a lender reviews your credit report as part of their decision-making process. This type of inquiry appears on your credit report and can influence your credit scores.
  • soft inquiry occurs in cases where you check your own credit. It can also be when a lender or credit card company checks your credit to pre-approve you for an offer. Soft inquiries do not appear on your credit report and do not impact your credit scores.

What Is A Soft Credit Search?

To conduct a Soft credit search we need your name, address, date of birth, postcode and main bank account details. In addition, we need your employment information, income, dependents (for loans) and residential status, which can all have an impact on the lending available to you.

For further information have a look at the Citizens Advice Bureau website or, if you are interested in seeing your own credit report, have a look at some of the most popular Credit Reference Agencies. (Credit reference agencies are companies which are allowed to collect and keep information about consumers’ borrowing and financial behaviour).

Experian Equifax or Call Credit

If you don’t know what your credit score is, it’s a good idea to find out, no matter what stage of life you’re at. If there’s a problem with your credit score, early detection means you have more time to fix it.

Correct any mistakes

It’s essential that the details held on your file are accurate. If you do spot a mistake on your file, you can contact the relevant agency and ask for a correction, explaining why it is wrong and supply any appropriate supporting evidence.

It’s also possible to check your credit file once a year by requesting a copy from all three credit reference agencies. It’s worth checking all three because they are likely to be slightly different.

The Consumer Credit Act gives you the right to obtain your full statutory credit report at any time, at a cost of £2 per report, so the outlay shouldn’t be more than £6.

In a Nutshell

A hard inquiry may impact your credit scores and stay on your credit reports for about two years. By contrast, soft credit inquiries won’t affect your scores. So, if you are considering applying for an online course with us and want to apply for monthly payments, you now know exactly why we conduct soft credit searches and that it’s nothing for you to worry about.

For more information, you can speak to one of our finance advisers directly by calling: 0330 057 2253.