What Is A Soft Credit Check?

A soft credit check, also known as a soft credit search, is an initial look at certain information on your credit report. Soft searches aren’t visible to companies, so it won’t affect your credit score. Only you can see them on your report. Lenders or creditors may perform a soft credit check when you apply for a loan, product, or service. It’s how they decide how successful your application would be.

What Does A Soft Credit Check Show?

A soft credit check is a background check that shows basic information, such as name, address, employment history and age. It may also show if you have been sued in past. But it’s nothing to worry about, unlike a hard credit search, it won’t affect your credit score.

How Does A Soft Credit Check Work?

Soft credit checks are performed when you apply for loans, credit cards or other financial services products to see if it’s possible for you to get a loan.

Soft searches are normally executed using an automated checking system (ACS). The automated checking system doesn’t contact credit bureaus and therefore don’t affect your credit score.

Soft checks don’t require your permission. This can be contrasted with hard checks, where permission is typically needed before the search is initiated.

What Are the Benefits of Soft Credit Check?

One of the benefits of a soft credit search is that they can determine whether a person can be approved for a loan like a personal loan or a bad credit loan.

A soft search can also be used when checking up on your insurance rates.

Another benefit of a soft credit search is that they allow you to find out if someone has misused your personal information for example, identity theft.

When you do a soft credit enquiry, it will tell you if anyone else has tried to access your information.

There are many other benefits of soft credit searches:

• It allows customers to check several finance options
• This can show up on your own credit report as an inquiry from the company requesting it in addition to any other inquiries in the past 12 months.

Also Read: Why Was My Loan Application Rejected?

Should You Be Worried About Soft Credit Checks?

No, it is unlikely that you should be worried about soft credit checks. They don’t leave a visible footprint on your credit file, and while it shouldn’t impact your credit score, you’ll be able to see if anyone has checked your credit history.

How Can I Check My Credit Score?

It’s easy to check your credit score. You can contact the three main credit reporting agencies in the UK: Equifax, TransUnion, and Experian credit report by phone or online.

Can A Soft Credit Search Be Carried Out Without My Knowledge?

Yes, a soft search can happen without your knowledge. But there’s nothing to worry about, soft checks won’t impact your credit score. This is because soft inquiries are completely harmless.

Read More About: Payday Loan Checklist

Not All Lenders Run Credit Checks

You may be surprised to find that not all lenders and credit reference agencies run credit checks. These are lenders who use soft credit checks instead of hard credit search.

Then there are lenders who may opt for open-banking. This allows customers to share their real-time financial information. This then helps the credit providers verify your income, spending habits and beyond. If you’d like to find out more, check our guide on what is open banking.

We hope that this article has helped you gain some insight into soft credit checks and how soft credit enquiries work.

For more information on any of these topics, don’t hesitate to drop your questions in our comments .

Please note, we are not providing financial advice. Our blogs are written for informational purposes only.

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