The Main Differences Between A Hard And Soft Credit Check

Keeping tabs on your credit score is important, and most suppliers will update your report every month. If you’ve been keeping an eye on your score you’ve probably seen a list of hard and soft credit checks. But do you know the difference between the two?

There are two different types of credit checks which can be done against you. Hard and soft credit checks are very different and serve different purposes.

What is a soft credit check?

A soft credit check is done to check your background for purely informational purposes, and not to do with taking out credit. These checks are not visible to other parties who request a soft credit check from you. But you can see all the places that have done a soft credit inquiry against you.

The check provides your credit history and has no impact on your actual credit score and they don’t require your approval to happen.

When might a soft credit check be conducted?

There are many scenarios when one might be conducted including:

• If you’re signed up to a credit score application such as Clearscore, Experian or Credit Karma, they’ll do a soft credit check each month to see the information in order to provide you with a score
• Pre-employment screening may happen on your credit score depending on the industry and job you’re applying for
• Some financial institutions may offer you an insight into whether you’d be approved for credit without it affecting your score. They’ll perform a soft credit check to give you this information

What is a hard credit check?

There are quite a few differences between a hard and soft credit check as hard checks are more in-depth into your financial records. These types of checks will leave a visible footprint on your credit history, and other institutions will be able to see these checks. This type of check is typically done when you’re looking to apply for credit such as a loan, mortgage, credit card, finance, or mobile phone contract.

If a company is loaning you money then they need to have a more comprehensive view of your credit. By providing a solid picture it will help lenders decide if you’re suitable to give credit to.

You’ll always know when a hard credit check is happening as you need to provide consent for it to happen.

A hard credit check may affect your score by a few points but nothing major. Having more than one hard credit check within a six-month period can have a bit more of an impact on your score. It can be a sign that you’re relying on credit and it may affect lenders accepting you for future credit. After six months a hard credit check won’t affect your score, but it will stay on your report for up to one year.

Hard and soft credit checks on your report

When you look at your credit report you should always keep an eye on these checks. You should be aware of anything within the hard checks category as you’d have approved it. And while it doesn’t impact your score it’s a good idea to see what soft checks are connected to your report as well.

In the past few months I’ve had soft checks from:

• Credit score applications
• Zopa who provide my loan as I changed my credit with them
• Admiral car insurance as I renewed my policy
• Sprive who I did mortgage overpayments with for a while
• And a few places that looked purely for ID purposes

On your report you should be able to see what they were checking for. On my report I can see an ID check, credit quotation, insurance quotation etc

Did you know the difference between a hard and soft credit check?