Understand what a hard credit check is and how it affects you
What is a hard credit search
In general, a credit search is when a company looks at your credit report to see your financial history and determine if you are financially liable for credit. A hard credit search simply refers to a more in-depth check, and is typically carried out when you apply for a credit card, a loan and a mortgage, or if you’re entering a contract with a service provider.
What does a hard credit check show
A hard credit check looks at your full credit report, revealing any negative marks on your credit history like overdue payments or debt collection.
A company may check your full credit report for any of the following information:
- Personal details, like your name and date of birth
- Current and previous addresses
- If you’re on the electoral register
- Any outstanding credit, including credit card accounts, loans, and any debts you owe to utility providers or other companies
- Any late, missed, or incomplete repayments from the last six years
- Your current account provider and any record of overdrafts
- If you’re linked to anyone financially, like a spouse
- Any public records from the past six years on issues such as bankruptcies and house repossessions
- If you’ve committed fraud or been a victim of fraud
Hard credit checks vs soft credit checks
As mentioned above, a hard credit check is the in-depth approach to a credit search, when a company does a complete review of your financial responsibilities to date. These searches become part of your record and remain visible to other companies. They can also affect your credit score.
On the other hand, a soft credit check is not visible on your report, so has no bearing on your credit score. A credit check will be ‘soft’ if you search your own report or if a company searches it to confirm your identity. You might also use this check to see if you’re eligible for credit without applying. Learn more about soft credit checks.
How long does a hard credit check last?
A hard credit check will stay on your report for at least twelve months. It’s important to keep this in mind when applying for credit, as too many applications could lower your credit score.
Companies performing the hard credit checks can see if you’ve been successful with other applications or not, and this will impact your ability to take out loans.
To protect your credit score, it’s best to keep your number of applications to two or three every few months. This way, if your score drops, you can take steps to improve and rectify it in a shorter space of time.
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Published December 2022