A soft credit check, or soft credit search, is an inquiry that occurs when a person or company checks your credit report as a background check. Instead, it looks at key pieces of information to check an individual’s credit worthiness, so that lenders can assess whether the individual will be successful in applying before carrying out the full examination of a credit report.
When a lender searches your credit report, they’re looking to see how you manage your credit now, and how you’ve managed it in the past. This search is then recorded on your credit report for future lenders to see. This is useful to lenders because if you’ve made a lot of applications for credit recently, it could suggest to them that you have an urgent need for credit which you may struggle to pay back.
So what can you do? You need the finance but don’t want to jeopardise your credit report by applying, and having to apply in full each time means it is extremely difficult to shop around for the best deals. This is where a “Soft Credit Search” can be so important for anyone looking for some form of credit.
A soft credit check, also known as a “Quotation search” takes a look, a kind of ‘snapshot’, at an individual’s credit report without leaving any footprints visible to lenders when they look at your credit report (you can still see them). Instead, it looks at key pieces of information to check an individual’s credit worthiness, so that lenders can assess whether the individual will be successful in applying before carrying out the full examination of a credit report.
Surprisingly few companies conduct a soft credit search. Those who do, such as Creditplus, are arguably ahead of the curve if current trends in finance regulation are anything to go by. Many companies conduct a full search, making it difficult for individuals to shop around for the best deal.
Choosing a company that provides a soft credit search option can be an ideal option for those who have been working to repair their credit report. You can see what finance options are available without risking all the hard work you’ve been doing to improve your credit report. You will also have more freedom to shop around and find the best deal. Soft credit searches really are an important thing to consider when applying for any form of lending, to ensure you have as much flexibility and control as possible before agreeing to any form of lending agreement.
Guest post from James Dwyer, blog manager at Creditplus car finance