Soft Search Loans

What is a soft search loan?

Soft search loans allow a lender to check your credit history and access your report but they don’t leave a marker behind. Insurance providers have been using this function for many years now when you apply for a quote. This allows a loan provider to see a top-level overview of your credit history so that they can pre-approve you. It simply means you can learn how likely you are to be accepted for a loan and how much the lender will offer you, with no impact on your credit score.

When a soft credit check is completed by a lender, it will be recorded on your credit report, but only you will be able to see it. As providers can’t see these checks, it doesn’t affect your credit score.

Related: What is a credit score?.

Benefits of a soft search loan

Soft credit check loans have a range of benefits, including:

• It doesn’t show on your credit report, even if you are rejected
• You can use this search to compare what different lenders will offer you
• It’s a great way to check your own credit score

Difference between hard and soft search loans

The biggest difference between a hard and soft credit check is that the soft search does not leave a marker on your credit record, whereas a hard search does. This is because a hard search will appear on your credit score for lenders to see, whereas only you can see soft searches.

A soft search is done when you request a quotation from a loan provider to find out what they are likely to approve you for and what interest rate you can expect. This is done before you apply for a loan, allowing you to check your eligibility and compare lenders. A hard credit check, on the other hand, is done when you actually apply for a loan. The hard search will allow the loan provider to see a full view of your credit history and how you’ve managed borrowing in the past. Therefore, a hard search can negatively affect your credit score, but a soft search does not.

There are lots of things that can affect your credit score, not just applying for loans. In fact, you may be surprised at some factors that can have a negative effect! Read our blog on surprise factors that can affect your credit rating to find out more.

What to consider before applying for a soft search loan

Before applying for a soft search loan, be sure to consider the following:

• Income and outgoings – Your income and outgoings will help a lender decide if you can afford monthly repayments
• Credit history – You don’t need a perfect credit score to get a loan, but it’s important to be upfront and honest so the lender can assess you properly on the soft search
• Eligibility – Each lender has their own lending criteria; if you don’t meet these, you won’t be accepted for a loan
• Why you require a loan – Some lenders will only accept loans for certain purposes, so be honest about the reason you require a loan