What is a credit check?

When a company looks at your credit report, it's called a credit check (or credit search).

Companies carry out credit checks to understand your financial history and determine how reliable you are at making repayments. 

Lenders usually carry out a credit check when applying for financial products like credit cards, mortgages, or personal loans. They're also routinely done by utility companies, landlords, and even some employers. 

There are two types of credit checks: a soft credit check and a hard credit check. Below we discuss each in detail and answer other common credit check questions.

We'll answer: 

• what's a soft credit check?
• what's hard credit check?
• how long does a credit check take?
• what information does a credit check show?
• how do credit checks affect credit scores?
• how often credit checks are updated?
• can you get a loan without a credit check?

What's a soft credit check?

A soft credit check is a snapshot of your finances. It's not visible to other lenders ; only you can see when a soft credit check has been carried out. 

Soft credit checks are done when you:

• check your credit score
• use an eligibility checker 
• use price comparison websites

It won't impact your credit score.

What's a hard credit check?

A hard credit check is more of an in-depth look at your financial history. Companies must ask your permission to carry one out. You can't delete hard credit checks from your credit history, but most are automatically removed after 12 months.

Hard credit checks are usually done when you:

• apply for credit products like a credit card, loan, or mortgage
• take out a mobile phone or utility contract
• rent a property

A hard credit check can impact your credit score.

How long does a credit check take?

Credit checks can take between a few seconds and a day, depending on the requested information. 

What information does a credit check show?

Both soft and hard credit searches show: 

• personal details, like your name, date of birth and current and previous addresses
• any outstanding credit that you have
• your repayment history
• your financial links, like a spouse you share credit with
• public record information from the past six years on any court judgements or bankruptcies 

A hard credit check will delve deeper and give an overview of your credit history. 

Do credit checks affect my credit score?

Soft credit checks don't impact your credit score either way. It's a good idea to periodically review your credit score and look for ways to improve it. Checking your credit score uses soft checks, so doing it won't have an effect.

Hard credit checks can negatively impact your credit score because if a lender sees you've had several in a short time, they could perceive you as financially unreliable. 

You should space out hard credit checks as much as possible. One way to reduce the number of checks carried out on you is to use an eligibility checker before you apply for products like credit cards or loans. 

Eligibility checkers use soft credit checks to show you what products you’ll likely be approved for without applying. They can be a valuable way to avoid hard credit checks for products you probably would disapprove of.  

How often is my credit score updated?

Your credit score is typically updated at least once a month. 

You can check your credit score as much as you like using one of the leading free credit rating agencies: Experian, Equifax, and TransUnion. They all have apps which are free to use. 

Generally, checking your credit report with each agency at least once a year is a good idea. You can also check what searches have been made on your credit report and flag any that look suspicious or any that you don't remember giving your permission for. 

Can I get a loan without a credit check?

Most lenders will carry out a credit check. You'll need a credit check to take out a loan with us, for example.

Lenders who don’t need a credit check will usually charge you higher interest rates or fees to make up for your uncertain (or lack of) credit history.  

No-credit-check lenders will still look at alternative information on you, such as your income, to determine your borrowing reliability.