It’s a good idea to check your credit report regularly to better understand your credit position. It’ll also give you a good idea of what lenders will see when they perform soft or hard credit checks before approving finance applications. But does checking your score count as a search? And does it lower it?
In short, no it doesn’t it’s classed as a soft search, with won’t impact your score at all.
How can I check my credit score without lowering it?
Many people worry about checking their credit score or requesting a copy of their credit report for fear that it might negatively impact their credit score.
Checking your credit score or credit report will not lower your credit score, even if you check regularly. In fact, it’s recommended that you check your credit score and view your credit report often to make sure everything is accurate and up to date.
Difference between a hard or soft inquiry/search
The main difference between a hard inquiry and a soft inquiry is that a hard inquiry will leave a mark on your credit report, whereas a soft inquiry won’t.
Soft inquiries are usually performed by companies to prove you are who you say you are. This won’t be visible to other companies and won’t leave any trace on your credit report. Often credit products will see if you want to ‘check your eligibility, which is also a soft search, so they can give you an indication of your approval (but not a guarantee).
Hard inquiries are performed by companies when you actually go to apply for credit. This can be for products such as applying for a loan, credit card, mortgage or phone contract. This will be visible to other companies and will leave a mark on your credit report. It will often knock it slightly, but it will soon recover, as long as you keep up with your repayments.
Most hard inquiries will stay on your credit report for up to 12 months.
How many points does credit score go down with hard inquiry/search?
Since there are three main credit reference agencies (Experian, Equifax and TransUnion), there isn’t a set amount of points a hard search will knock you back.
The best thing to do is avoid unnecessary hard searches, so only apply for a credit product once you’ve gone through a risk-free eligibility check (soft search) to be confident about your approval.
How to know which lenders do a soft or hard search?
All lenders will perform a hard search when you actually apply for credit. This is so they can determine whether you’re a financial risk. However, the vast majority will offer a soft search first, so you can check your likelihood of approval. We offer a risk-free soft search for our credit card, personal loans, secured loans and car finance.
When it comes to getting a mortgage in principle (also known as an agreement-in-principle), it does vary with which lenders conduct a hard or soft search.
What’s the fastest way to build credit?
If you’ve checked your credit score and noticed there’s room for improvement, there are certain things you can do to help build your credit score:
- Pay your bills on time – if you miss a payment this will be logged on your report, which could make lenders think you’re a financial risk. Try setting up a direct debit for all your regular repayments to ensure you don’t miss any.
- If you’ve got a loan and your lender allows it, make regular repayments whenever you can so that your debt gets paid off quicker. This will look attractive to any potential lender as they’ll assume you’ll make an effort to pay all your debts quickly.
- Pay off your debts before you apply for any new credit. To lenders, this will be a sign that you’re a responsible borrower. It also means you’re less likely to take on more debt than you can handle.
- Make sure there aren’t any issues with your credit report. Check that you aren’t financially linked with anyone you shouldn’t be and that your address details are all correct.
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