Soft credit check
If you’re thinking of getting car finance at some point you’ll need to have a credit check. There are two kinds of credit check: a soft credit check (also called a soft search) and a hard credit check (or hard search). But what’s the difference and why does it matter?
What is a soft credit check?
A soft credit check is a top-level overview of your financial history. It’s a first look at certain information on your credit report, based on information provided by you. Lenders perform soft credit checks to help them decide whether you’re eligible to apply for credit with them or to check that you qualify for certain offers.
You can also run a soft check on yourself: it’s a useful way to determine how eligible you might be for a range of credit, including car finance, before deciding to apply. There’s no limit to the number of soft checks you can have, and they’ll never affect your credit rating.
Reasons for a soft credit check include:
- An employment verification – this is where a potential employer (or sometimes a landlord) wants to confirm you are who you say you are and check that you are financially responsible.
- When a credit card company or another credit provider reviews your credit to check if you qualify to receive certain offers.
- You may want to check your own credit rating from time to time or before you make an application for a finance product to decide whether to apply.
What does a soft credit check show?
A soft credit check only reveals that your credit report exists; it doesn’t reveal your actual credit score. Only publicly available information will be visible, such as your electoral roll status, your name, address and a basic overview of your financial history. Credit account history, past applications and financial associations won’t be visible on a soft check. Your credit score itself won’t show up, nor will it be affected in any way by a soft credit check.
What is a hard credit check?
A hard credit check generally takes place when a financial services company is making its final lending decision. A hard check usually occurs once you have actively decided to buy a car and have applied for finance, or you’ve applied for a mortgage, a credit card or another kind of loan.
Visible to other lenders, hard credit checks normally stay on your credit record for 12 months. Soft checks also remain on your credit record for 12 months but are only visible to you.
You should try to avoid having multiple hard searches over a short space of time, as they can suggest to lenders that you’re in urgent need of credit and are therefore a high-risk customer. So it’s best to avoid applying for lots of credit cards all at once.
At Oodle we'll only run a hard search if you’ve already been pre-approved to apply for finance with us and you've decided to take up that finance. The hard credit check is undertaken once you have agreed to proceed with the agreement.
What's the difference between a soft and hard credit check?
| Soft search | Hard search | |
|---|---|---|
| You can see it on your own credit report | ✔️ | ✔️ |
| Lenders and organisations can see it on your credit report | ✔️ | |
| It will stay on your credit record for 12 months | ✔️ | ✔️ |
| It is recorded when you apply for credit | ✔️ | |
| It is recorded when you apply for a utility contract | ✔️ | |
| It is recorded when an identity check is carried out | ✔️ | |
| It is recorded when you check your own own credit report | ✔️ |
Can you fail a soft credit check?
No, don’t worry. You’re not actually applying for anything with a soft credit check, so you can’t ‘fail’ or be penalised. Soft credit checks simply give you a good indication of whether you’re likely to be approved for credit should you then go on to apply.
While a soft credit check won’t leave a permanent imprint on your file, it is recorded – usually for 12 months. No lenders will be able to see this record and it won’t affect your credit score, but you’ll be able to see if anyone has checked your recent credit history.
What is your credit score and why is it important?
Your credit score – a three-digit number between 300 and 999 – gives potential lenders an idea of how reliable you are at borrowing and repaying debt. Lenders will look at your credit score to decide whether to offer you credit and how to structure your repayment options.
Generally, the higher your credit score, the greater your chances of being accepted for credit and the better (lower) the interest rate is likely to be. If you have a low credit score it doesn’t mean that you will be refused credit but you will have to shop around – and you can expect to pay a higher interest rate.
Find out more about credit scores and credit reports here.
Does a soft credit check affect your credit score?
No. Because a soft credit check doesn’t reveal your credit score, it has no impact upon it. Instead, it gives prospective lenders an idea of your creditworthiness, helping them to decide whether to offer you credit. Soft credit checks are visible to you only.
Applying for finance at Oodle
When you apply for finance at Oodle we’ll ask for three years of address history and one year of employment history, plus a few personal details including your annual salary after tax. Based on publicly available information (electoral roll, current earnings, address) and how much you tell us you’d like to borrow, we can tell you within a few moments whether you pre-qualify for car finance, and what your repayments could look like.
It's worth reiterating here that passing any soft-check pre-approval process doesn’t automatically guarantee that lenders, including Oodle, will go on to offer you finance. Rather, it gives you an indication of whether they are likely to, and an illustration of what your repayment rates might be. Equally, should you choose not to progress with a full finance application after completing a soft-check eligibility checker, that’s completely fine – you won’t have a trail of credit checks negatively affecting any future finance applications.
Car finance calculator
If you’re thinking of applying for car finance with Oodle, that’s great! Your first stop is our car finance calculator to get an idea of what your budget could be. Using the finance calculator won’t affect your credit rating in the slightest and you can use it as many times as you like; what it will do is help you decide whether you’re in a healthy financial position to take things forward.
This free tool will give you an illustrative example of what your monthly repayments may look like, depending on how much you’re looking to borrow, helping you to set the best budget for your circumstances.
Your monthly payment
£215.08
Total borrowed
£10,000
Total cost of credit
£3,004.80
Apply now for your personalised, no-obligation quote
Apply Now* Representative Example: With hire purchase credit of £10,000 over 60 months based on a cash price of £10,000 with £0 deposit and a representative APR of 15.9%, the amount payable would be £235.92 a month, with a total cost of credit of £4,255.20 and total amount payable of £14,255.20. The total amount payable includes a £50 documents fee and £50 option to purchase fee.
This calculator is for illustrative purposes only. The calculated monthly repayment is not a quote or an offer of finance. Our finance rates vary and depend on individual circumstances. You will not own the vehicle until you have made the final payment and the option to purchase fee. Lending is subject to status and available to applicants over 18 years old.
Soft credit check FAQs
- Do CCJs show on a soft credit check?
No, CCJs will not show up on a soft credit check. They will, however, stay on your credit report for up to six years and will be visible on any hard credit check during that time. Your score will be reduced as a result, impacting your ability to access credit.
- Does a soft credit check show defaults?
No. As above, a soft credit check won’t disclose defaults or insolvencies, although any hard check will reveal any that have occurred within the last six years.