Hard credit check
You may have heard of the term ‘hard credit check’ and wondered what it involves. Here we’ll look at exactly what a hard credit check is, what the differences are between a hard and soft credit check, and what it all means for you
What is a hard credit check?
A hard credit check, or hard credit search, is a detailed review of your financial history as it appears on your credit report. It is usually undertaken by a potential lender after you’ve made a full application for credit with them – for example for a new credit card, mortgage, car finance or another type of loan. The hard credit check enables lenders to make an accurate assessment of your financial reliability, or creditworthiness. They will use the findings from a hard credit check to decide whether to lend to you.
Soft credit check
The key difference between the two is that a soft credit check is a quick overview of your credit health that relies on information provided by you. A soft credit check only shows that your credit report exists – it doesn’t reveal any specific information from it. It won’t impact your credit report, and there’s no limit on the number of soft credit checks you can make. You can even run soft credit checks on yourself.
Hard credit check
In contrast, a hard credit check is a thorough trawl of your credit report itself and forms the basis of
a lender’s decision whether to offer you credit. It may sound alarming, but don’t be intimidated – a hard check will usually only happen once you have actively applied for a finance product and is just a part of the process.
At Oodle, we will only ever run a hard search if you have already been pre-approved to apply for finance with us and you then decide to take up that finance. The hard credit check is undertaken once you have signed your agreement with us and not before.
Learn more about credit scores and credit reports here.
What does a hard credit check show?
A hard credit check is an in-depth look at your financial history. It will show the lender how you’ve managed credit in the past and how many loans you are currently juggling. Based upon the
information in your credit report, the lender decides how financially responsible you are and how reliable you are likely to be at repaying credit.
Any lender carrying out a hard credit search will be able to see your full credit report, which includes the following information:
Name, date of birth, current and previous addresses.
Whether or not you’re on the electoral roll.
All outstanding credit arrangements you have, including credit cards, mobile phone contracts, mortgages, car finance and any other outstanding debt.
Any incomplete, late or missed repayments over the last six years.
Any financial links you have to anyone else, for example joint accounts or mortgages.
Your current account provider and any outstanding overdrafts.
If you’ve ever been a victim of fraud or committed fraud.
Publicly available records of any house repossessions, bankruptcies, county court judgements or any other insolvencies that have occurred over the last six years.
The lender will then run a soft search on you, and together with the information you’ve provided above will decide within minutes if they’ll approve you to make a full application. A soft credit check won’t affect your credit score.
What happens if I fail a hard credit check?
If you fail a hard credit check, don’t panic. A hard credit check will stay on your report (unlike a soft credit check, which is only visible to you) but usually only for around 12 months.
Although any negative marks on your credit report, such as debt collection or missed payments, will remain on your report for several years, they won’t be there forever. Plus, there are steps you can take to actively improve your credit score and increase your chances of being accepted for finance in the future. These include:
Making sure you are on the electoral roll.
Consolidating any existing debts and making regular repayments.
If you can, end any financial agreements you have with anyone with a poor credit rating.
Cancel any unnecessary subscriptions and keep your spending in check.
