In short, a soft search is a kind of credit check that isn’t recorded on your credit file. Will checking my options affect my credit score? Using a soft search allows you to search for loans without it affecting your credit score.
What is a credit score?
In order to understand what a soft search is, it is helpful to explain credit scores. Your credit score is a number, based on your financial history, that lenders use to determine if you’re eligible for a loan or additional credit. That score can go up and down depending on the borrowing habits of an individual. Borrowing money – paying it back regularly and on time – can improve your credit rating. Meanwhile, borrowing money and not paying it back on time can result in a credit score decreasing. A high credit score can make it easier to borrow money, whilst a low credit score can make it harder.
If a lender runs a credit check on you, this can leave a footprint that can be seen by other lenders. If you have too many on your credit file in a short space of time, this can negatively impact your credit score. A soft search still gets marked on your credit record, but it cannot be seen by other lenders.
What does soft search mean?
A soft search is sometimes also referred to as a “quotation search” or a “soft check”. It means a lender can check your credit history without recording the search on your credit file. This means that a soft search loan check may not be visible to other lenders and it will not affect your credit score.
A soft search differs to a hard search. Hard searches are recorded on a credit file and can be seen by other potential lenders on your credit file for at least 12 months.
Where a soft search credit check is still noted on a credit file, it cannot be viewed by lenders. This means that a soft search allows for you to search for loans and compare your results without it affecting your chances of receiving finance in the future.
What’s wrong with searches appearing on your credit file?
When your credit file records several searches in a short space of time, potential lenders can look at this negatively. The reason for this is because it can be linked to a number of reasons that might suggest you’re a risky person to lend to, including potentially being over reliant on borrowing money from various different sources.
To ensure this doesn’t happen, when you’re checking your eligibility for a loan, you can use a soft search and it won’t affect your existing credit score. By not affecting your credit score, a soft search allows for you to fully understand your options and what loans could be available to you before committing.
How does a soft search work?
To successfully carry out soft search loan research, it usually requires telling the lender or broker a little about yourself. This is because they will need your personal details to find out your credit history. They’ll then generate the results you’re eligible for based on the information you’ve given such as the amount of money you want to borrow.
Will I definitely be accepted for a loan after my soft search?
A soft search result shows your suitability for the loan or credit, and are perfect when you want to research loans. They allow for you to conduct your own loan research, knowing that it will not affect your credit score. If you decide to proceed with specific lender, they may want to run a hard search on your credit file. A soft search doesn’t always guarantee you’ll be approved for credit at a later stage. That’s why here at Freedom Finance, we add pre-approval ratings to our search results, giving you a better idea of your chances of being accepted.
How does a Freedom Finance soft search work?
When you look to conduct a soft search through Freedom Finance, we will ask you to check your eligibility with our lenders. If you are eligible for credit, you’ll then be shown results tailored to the details you’ve submitted.
What if I keep being rejected for loans?
If your soft search results aren’t showing you anything that’s right for you, there are a few things you can do.
First, you can apply for a copy of your personal credit file and look to see if there are any errors. Errors on your credit file can influence your search results, so it can be a good idea to check that the details on there are correct. If there are any errors, then these can be disputed with a credit reporting company to rectify the problem.
Alternatively, if there are no errors on your report, you could also work on improving your credit score. A better credit score may improve your chances of being accepted for a loan. There are several ways to do this. Be sure to read our credit score guide for helpful advice on how to improve your credit score.
Finally, if you are struggling to get loan or credit suggestions through a soft search, you may want to consider other types of borrowing. To get up to speed with other options that are potentially available to you, check out our guide on how to compare loans.