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What is a Credit Search?

posted by Carla on Monday, 11 June 2018

Credit check? Soft and hard credit searches? Footprint? Credit reporting? Credit file? Scores?

All of this can be both confusing and daunting if you don’t know what it means. Here, we explain what happens when a business or company performs a credit search and the different types of checks they may make.

What is a credit score check?

Put simply, a credit check is how a lender assesses if you’re a reliable person to lend money to. The lender is looking for reassurance that you can manage your debts. 

Your credit check paints a picture of whether you are likely to run into financial trouble or potentially default on payments. 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 depending on the type of inquiry they make.

The higher your credit score, the more reliable and trustworthy you look to lenders. Some types of credit checks will decrease your credit score, so these inquiries must be performed as infrequently as possible.

Types of credit checks

There are two types of credit inquiries: hard and soft. 

What is a soft credit check?

A soft inquiry occurs in cases where you check your own credit score. It can also be used by a lender or credit card company as part of their pre-approval process. Soft inquiries do not appear on your credit report and do not impact your credit score.

What is a hard credit search?

A hard inquiry occurs when a lender reviews your credit report as part of their decision-making process. This type of inquiry does appear on your credit report and can influence your credit score.

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. (These are companies which are allowed to collect and keep information about consumers’ borrowing and financial behaviour).

Check your credit score 

If you do not know what your credit score is, it’s a good idea to find out. If there’s a problem with your credit score, early detection means you have more time to resolve it. 

You may want to check your credit file once a year by requesting a copy from any of the three credit reference agencies. It’s worth checking all three because they are likely to differ slightly from each other. The Consumer Credit Act gives you the right to obtain your full statutory credit report at any time, at the cost of £2 per report, so the outlay shouldn’t cost more than £6 per year.

The details held on your file must be accurate. If you do spot a mistake, you should get in touch with the relevant agency for a correction. Simply explain why the information is wrong and supply any appropriate supporting evidence.

What type of credit check does Oxbridge perform?

We work with a couple of hand-picked credit partners which allows you to have flexibility in how you choose to pay for your course. We often get asked whether we perform a soft or hard credit search when students opt to pay for their course via 0% interest monthly instalments. Oxbridge conducts a soft credit check when you apply for a course with this payment plan.

To conduct a soft credit search, we need your:

  • Name
  • Address
  • Date of birth
  • Postcode
  • Main bank account details
  • Employment information
  • Income
  • Dependents (for loans)
  • Residential status

Credit scores in a nutshell

Hard credit inquiries can impact your score and will stay on your credit reports for approximately two years. In contrast, soft credit searches won’t affect your score.

So, if you are considering applying for a distance learning course with us and want to take advantage of our monthly payment option, you now know exactly why we conduct soft credit searches and that it’s nothing to worry about.

For more information, you can speak to one of our finance advisers directly by calling: 0330 630 3000