Are Credit Searches Damaging to your Credit File?

Curious about Credit

A credit search, or credit check, is a snapshot of your financial behaviour used by credit providers to indicate “risk” of lending money. There are two different types of credit searches; one that won’t affect your credit rating, and one that could.

‘Hard’ credit searches: When you apply for credit, such as a mortgage or credit card, the lender will run checks to see how likely you are to meet repayments. If you’ve applied for a new job or want to rent a property someone might run a credit search to confirm your identity and see how you manage your money. These are called ‘hard’ credit checks.

‘Soft’ credit searches: To check your credit as it would appear to potential lenders, you can run a ‘soft’ search. A soft searches on your credit file can also be carried out by third parties to pre-approve you for credit, like a mortgage in principle.

What happens in a credit search?

In a credit search, your financial history is thoroughly checked and scored. Lots of factors are considered, including your level of debt, late payments, CCJs, IVAs and bankruptcies. This also includes anyone you’re linked to financially and whether you’re on the electoral register.

You’re given a score for each section and the sum of all the scores is a three-digit number. This is your credit score or rating.

Different credit referencing agencies use different scores, but on a scale of 0 to 999 for example, a good score would be somewhere between 800 and 950, and a fair to average score would be between 700 and 800. At DivideBuy, we use TransUnion as our credit reference agency. You can check your credit score through them for free here.

What effect does a credit search have on my credit file?

Soft credit searches don’t affect your credit file, and you can check your credit as often as you like in this way. Checks will be recorded on the file but are not visible to third parties so it won’t affect the way lenders see you.

A hard credit search alone isn’t likely to have an impact on your credit file, it’s only when several hard searches are carried out in a short period of time that your credit score could be affected. Hard credit searches show up on your credit file, and too many in a short timeframe could indicate that you’re trying to open a few new accounts at the same time.

In turn, this kind of activity might suggest that you’re in a bit of hot water financially, perhaps struggling to pay bills or overspending, which equates to “risk” as far as lenders are concerned. As a result, you might notice a temporary drop in your credit score.

How long do credit searches stay on your file?

Soft searches on your credit file don’t leave any kind of black mark on the file, and although they are recorded, only you can see them.

Hard credit searches are visible to you and third parties, and most stay on your credit report for just over a year. Some hard searches may stay on your credit file for longer and searches by debt collection companies are visible for a couple of years. For example, any missed payments can show for up to 6 years.

Most hard credit searches on your credit report won’t affect your credit file after a year, but it’s a good idea to avoid any unnecessary hard checks. At DivideBuy, we offer a soft search function so you can see how likely you are to be accepted for credit before making any formal applications.

A soft credit search is a free way to find out where you stand financially, highlighting any loans and credit you have as well as your payment history. A soft check can help you figure out whether you need to rebuild your credit file or take other steps to improve your credit rating.

Call us on 0800 085 0885 and one of our friendly representatives will be happy to tell you more!

Recent Articles
Get healthy at home with gym equipment and blenders
Getting healthy at home has so many benefits for your mind, body and bank balance. With everything from NutriBullets to gym equipment on finance from our retailers, you can kick off your healthy new lifestyle right now, even on a budget. Whipping up meals or working out at home can often be a healthier, more […]
5th May 2021
Happy homes and happy pets with vivariums and aquariums
Pets come in all shapes and sizes, but one thing they all have in common is the need for a safe and suitable environment to thrive in. Exotic pets, in particular, need purpose-built homes like tanks, aquariums and vivariums, which can be pricey. But with aquarium and vivariums on finance, you can spread the cost […]
30th April 2021
Renovate your bathroom with interest free credit
The bathroom gets a lot of regular use and as such, it’s a room that really needs to be fit for purpose. If the shower’s getting a bit shabby or the sink is showing signs of wear and tear, you can transform the space even on a tight budget with bathrooms on finance from DivideBuy. […]
21st April 2021

Subscribe & Follow

Customer
Newsletter

Sign up to receive news, offers and new retailers as it happens.

Our use of cookies

We use necessary cookies to make our site work. We'd also like to set optional analytics cookies to help us improve it. We won't set optional cookies unless you enable them. Using this site will set a cookie on your device to remember your preferences.

For more detailed information about the cookies we use, see our Cookies page


Necessary cookies

Necessary cookies enable core functionality such as security, network management, and accessibility. You may disable these by changing your browser settings, but this may affect how the website functions.


Analytics cookies

We'd like to set Google Analytics cookies to help us to improve our website by collecting and reporting information on how you use it. The cookies collect information in a way that does not directly identify anyone. For more information on how these cookies work, please see our Cookies page .