Credit Score Basics > What does a hard credit check mean?

What does a hard credit check mean?

There are two kinds of credit checks: soft and hard. A hard credit check is when a company requests a copy of your full credit report.

A hard credit check can also be called:

• Hard inquiry
• Hard search
• Hard pull

By seeing a full copy of your credit report, the lender can see how much credit you have, how you've handled debts and bills in the past, and if you can afford to take more.

They'll use this data to figure out if you're financially responsible and how likely you are to pay them back.

When is a hard credit check carried out?

A hard credit check is usually run when you apply for a financial product. Some examples of financial products that require a hard check:

• Credit cards,
• Loans,
• Mortgages,
• Car finance deals,
• Personal loans,
• Or student loans.

Occasionally, you might be asked to have a hard check run for things like:

• Flat or house rentals,
• Mobile phone contracts (especially ones coming with a premium handset),
• Or other utilities (broadband internet, etc).

If you work in certain sensitive sectors, like finance, you might even be asked to allow future employers to run a hard check on your credit report.

One thing to remember: companies, banks, credit card providers, letting agents, employers, and so on, must always request your permission before they complete a hard credit check. They can't run one without it.

What does a hard credit check show?

A hard check will show your full credit report, including:

• Personal details, like your name and birth date;
• Your current and previous addresses;
• If you registered to vote;
• Existing credit and debts, including credit cards, loans, and other debts;
• Any late or missed repayments from the past six years;
• Your current account provider and if you have overdrafts (but not how much money you have in your account);
• Your financial links – for example, someone you share a bank account or mortgage with your spouse;
• Any public information from the past six years on bankruptcies, defaults, County Court Judgments (CCJs), or individual voluntary arrangements (IVAs).

What's the difference between a hard check and a soft check?

There are three main differences between a hard check and a soft check:

• Hard checks show more information than soft checks;
• Hard checks affect your credit score; soft checks don't.
• Hard checks leave a mark on your credit report, which other companies can see, while soft checks can only be seen by you.

This mark stays on your credit report whether your application is successful or unsuccessful or if you decide not to go ahead.

This means that other companies and lenders can see if you've been applying for credit, and they can use this information to build a more complete picture of your financial health.

How does a hard credit check affect my credit score?

Hard checks impact your credit score because they signal that you might have debt that is not yet showing in your credit report.

The number of hard checks is what matters here.

One single hard credit check might only lower your credit score by a few points. After all, applying for a new credit card doesn't always mean that you're struggling financially.

But multiple hard checks, especially in a short period, can greatly impact your credit score. This is because they signal to lenders that you might be in a difficult position and even "living on credit."

However, keep in mind that if you're successfully approved for credit, this could also help your credit score in the long term.

This is because any credit account that can show you use credit responsibly (you repay on time and don't use more than 25% of the credit limit) is seen as a positive factor.

Most credit-building cards and apps, in fact, use this exact principle to help you improve your credit score.

Even Wollit works the same way – we report our monthly subscription as a loan repayment to all three credit reference agencies, helping you build a credit history and boosting your score at the same time.

How can I reduce the impact of hard checks on my credit score?

There are two things you can do to reduce the impact of hard checks on your credit score:

• Space out hard checks as much as possible. A good guideline is to submit no more than two credit applications every six months but keep in mind that different lenders will evaluate your credit score differently.
• Always use an eligibility checker whenever possible. You can find eligibility checkers for loans, for mortgages, and even for mobile phone contracts. Eligibility checks only count as soft checks.

Eligibility checks are great because they leave no marks on your credit record. Only you can see them. You can use them to figure out how likely you are to be approved for credit without actually applying and risking another hard search.

One more thing: last year (2023), Experian launched CreditLock in the UK. This new feature allows you to freeze your credit report so fraudsters can't make loan applications in your name.

According to Experian, 1 in 4 UK adults have been victims of fraud, and up to 75% of them have been targeted by fraudsters.

This is only available to Experian premium subscribers, but if you're concerned, it might be a way to avoid unwanted hard checks.

How long does it take for a hard search to appear on my credit report?

How long it takes for a hard search to show up on your file and impact your score really depends on the credit reference agency.

Usually, it takes anywhere between 14 to 45 days.

How long do hard searches stay on my credit report?

Most hard checks will stay on your credit file for 12 to 24 months.

Some, though, can stay on your file even longer – for example the hard inquiries run by debt collection agencies.

Can I get hard checks removed from my credit file?

No, you can't remove hard credit searches from your credit report.

The only exception is if you can prove that the hard search was conducted by a fraudster. If you see a hard search you don't recognise, contact the credit reference agencies immediately:

• Experian: by phone at 0115 828 6738 or email at [email protected].
• Equifax: by phone at 0800 014 2955.
• TransUnion: by phone at 0330 024 7574 or email at [email protected].

After you contact them, they will investigate and put a fraud alert on your account.

You should also report the potential fraud to Action Fraud, a branch of the UK police that specialises in this. You can reach them online or by phone at 0300 123 2040.

Once the suspicious hard check is confirmed as fraudulent, it will be removed from your credit file.

Can anyone check my credit report?

It depends. For hard searches, no – lenders and other businesses need your express permission before they check your credit file.

But sometimes companies can do a soft credit search without asking your permission.

This usually happens if you already have an account with them – for example when your bank checks your eligibility before sending you an email with some new credit card offer.

Can I see who checked my credit report?

Your credit report will list certain information about who made a hard search on your report. This information will include:

• The name of the business;
• The type of the business (bank, mobile network, utility company, and so on);
• When the hard search was made;
• And who to contact if you don't recognise the hard check.

What else can affect my credit score?

There are a few other factors that can negatively affect your credit score:

• Opening new accounts.
• Getting close to your credit card or overdraft limit.
• Going over the credit card or overdraft limit.
• Making too many loan applications in a short amount of time.
• Missing payments, especially if you do it regularly.
• Not paying back debt. This can have a huge negative impact on your credit score, especially if the lender takes you to court or if you have to declare bankruptcy or enter an IVA.

Finally, never borrowing at all can also have a negative impact on your credit score.

This may be surprising, but if you have never had credit, you might actually have a low credit rating. This is because lenders want to see a good payment history. This helps them figure out if you're a good borrower who is financially responsible and who can repay a loan on time.

The best way to fix this is to build your credit history, which you can do in multiple ways:

• Get a credit-building card (but be careful, they come with very high interest rates and fees);
• Or download a credit-building app like Wollit. Wollit is a much safer alternative to a credit-building card: it reports your monthly subscription as loan repayment, helping you build a good credit record and credit score.

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