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So, you have recently been thinking about your credit score, perhaps because you have been thinking of applying for a loan or another form of credit. And you know how important it is to have a good credit score – or at least, as good a credit score as possible, especially when it comes to maximising your chances of being approved for a loan.

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You might also be aware, however, of the basic differences between hard credit checks and soft credit searches, and the implications such a check may have for your credit score.

Hard credit checks vs soft credit searches

Hard credit checks vs soft credit searches

If you aren’t aware of the distinctions between a hard and soft credit check, let’s give you a quick refresher. A soft credit check, while allowing a company to check your credit score, doesn’t show up to other companies on your credit report, and it doesn’t impact on your actual credit score, either.

When you fill in and submit our no-obligation loan request form here at CashCompare, for instance, it is a soft credit search that our represented lenders will carry out, instead of a hard one. This “shallower” form of credit check is enough to enable lenders to assess your eligibility and creditworthiness, so that they can present possible loans to you.

CashCompare is authorized and regulated by the Financial Conduct Authority (FCA), ensuring our practices meet strict standards for fairness and transparency.

A hard credit check, on the other hand, is the kind of credit check you can expect to be carried out if you decide to accept a particular lender’s loan offer. It is a more in-depth look at your credit report than a soft check, enabling them to find out the amount of credit you are presently juggling, and your past behaviour in handling credit.

Such detailed information gained from a hard credit check will allow the prospective lender to judge the level of risk you would represent to them if they decided to lend money to you. The hard credit check, then, is a crucial stage of the process by which the lender will opt to grant you a loan, or instead decide against giving you credit.

So, what difference will a hard credit search make to my credit score?

what difference will a hard credit search make to my credit score

A single hard credit check may have relatively little, or even negligible impact on your credit score; it may reduce your credit score by a few points, and that might be about it.

The bigger risk is likely to be if a series of hard credit checks is carried out on you in a short space of time. This could indicate to potential lenders that you may be in serious financial trouble, and that you might be trying to apply for loans from a number of different sources as a result of this. That, in turn, could make you seem a riskier prospect as someone to whom to lend, which might result in lenders turning you down if you apply for a loan from them.

This potential for your credit score to be lowered more dramatically if your credit report is subject to a quick succession of hard credit searches, is one more reason why you will want to avoid too many hard credit checks being carried out on your file. This can be a particular danger if you are “shopping around” for a loan right now, and if you have a less-than-brilliant credit score already.

This helps to explain why, when many would-be borrowers are on the lookout for loans for bad credit in the UK, they don’t approach lenders one by one, but instead look at the broader market with the help of a broker such as CashCompare.

Applying for several loans over a short timeframe can significantly impact your credit score, potentially making it more difficult to obtain credit in the future. We advise you to consider your financial situation carefully before applying for multiple credit products.

As we stated above, in our capacity as a broker, we don’t carry out hard credit searches ourselves. Even if you use our no-obligation quote request form to see what loan options could be available for you, a hard credit search won’t be undertaken unless you accept a particular lender’s loan offer. This could be instrumental in minimising the potential adverse impact on your credit score of hard searches.

And with our own loan comparison service not requiring you to pay any fees either, turning to us here at CashCompare to sift through the wider market’s offerings, could be a practically risk-free “first step” in your search for a loan product that caters to your needs.

Before applying for credit, we recommend reviewing your financial situation to determine if borrowing is the best option for you. Seeking independent financial advice could also provide valuable insights into managing your credit effectively.

"Warning: Late repayment can cause you serious money problems. Always consider if borrowing is the right option for you and ensure you can repay your loan." For help, go to moneyhelper.org.uk.

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