Hard Credit Checks - what are they and how do they work?
Whether it’s a loan, credit card, mortgage, or car finance, if you’ve thought about applying for credit, you may have heard of the phrase ‘hard credit search’. You might have questions, like:
- What is a hard search?
- How long do hard searches stay on your credit file?
- What does a hard credit check show?
- What impact does a hard search have on my credit score?
- How long does a hard search affect your credit score?
In our guide, Little Loans takes a closer look at hard credit searches, when you might have one, and how it could affect your credit score.
What is a hard credit check?
When you apply for credit, the lender must carry out a creditworthiness assessment, which will include a hard credit search and/or an Open Banking check.
A hard credit search gives the lender an in-depth look at your credit history and how you’ve managed earlier credit commitments. Using this information, the lender will understand if you’re able to repay the money you’re applying to borrow.
When is a hard credit check carried out?
A hard credit check could be carried out as part of a creditworthiness assessment when you apply for credit with a direct lender.
This includes different types of credit products, such as:
- Personal loans
- Credit cards
- Mortgages
- Car finance
What does a hard credit search show?
A hard credit search will typically show:
- Any current credit commitments and how much money you have left to repay.
- Past credit commitments, including details of any late or missed repayments.
- Hard searches carried out by other companies in the last 12 months.
- Any county court judgements from the past 6 years.
- Any bankruptcies from the last 6 years.
Please note that lenders may be able to see other information on your credit report.
What impact does a hard search have on my credit score?
Multiple hard credit searches in a short period of time will harm your credit score. This could make it harder to borrow money in the future.
How many hard searches are bad in the UK?
While there is no set answer to this question, be aware of the number of credit applications you make.
Credit reference agency Experian states the following:
“A good rule of thumb is no more than two or three applications every few months, although remember that different companies have different criteria when it comes to your credit score.”
Can other companies see a hard credit check on my credit file?
Yes, a hard search can be seen by any other company that checks your credit file within the next 12 months.
How long will a hard credit check stay on my credit file?
How long does a hard search affect your credit score?
A hard credit search will show on your credit file for up to 12 months.
What else do lenders check?
Lenders look at more than just your financial history when deciding whether to approve your loan application. They will also check that you meet their eligibility criteria and can afford the repayments while still covering essential bills like housing, food, and utilities.
Can I avoid hard credit checks? Can I get a loan without a hard credit search?
You can’t get a loan without undergoing a full creditworthiness assessment, which includes a hard credit search and/or an Open Banking check.
Some lenders use an Open Banking check instead of, or as well as, a hard search. With your permission, an Open Banking check lets the lender see your recent bank account activity. This gives them a more up-to-date view of your finances, rather than relying on your credit history alone.
Have you thought about using a credit broker to look for a loan? A credit broker will scan a panel of lenders at the same time, using a soft search. A soft search by itself does not affect your credit score.
Using a credit broker could help you avoid making multiple applications with different lenders and undergoing more than one hard search.
Will Little Loans carry out a hard search?
Little Loans is a credit broker. We will not carry out a hard search when you use our credit-broking service to search for a loan. Instead, we use soft search technology, which will not hurt your credit score.
If you’re matched with a loan and choose to make a full application with the direct lender, they will then carry out a creditworthiness assessment. As we’ve talked about, this will include a hard search or an Open Banking check.
Who can search for a loan with Little Loans?
You can search for a short-term personal loan with Little Loans if you:
- Are over the age of 18
- Are a UK resident
- Have a UK bank account and a valid debit card
- Have a regular source of income paid into your bank account
5 reasons to consider Little Loans
- Little Loans is a credit broker, working with over 30 lenders, all authorised and regulated by the Financial Conduct Authority (FCA).
- You could search for a loan between £100 and £10,000.
- Depending on the amount of money you apply to borrow, you could repay your loan over a term from 3 to 60 months.
- Searching for a loan with Little Loans will not harm your credit score.*
- If your application is approved by one of our lenders, your money could be sent the same day.**
Hard search vs soft search: what’s the difference between a hard credit check and a soft credit check?
We’ve outlined the key differences between hard and soft credit checks in the table below.
| Soft credit check | Hard credit check |
| A brief overview of your financial history. | An in-depth overview of your financial history. |
| Carried out by credit brokers and some direct lenders to check your eligibility. | Carried out by direct lenders as part of their creditworthiness assessment. |
| No effect on your credit score. | Multiple hard searches in a short period of time could damage your credit score. |
| Will only be visible to you and the company which searched. | Any company that looks at your credit file will be able to see hard searches from the last 12 months. |
You can find out more about soft search loans in our guide.
Are you struggling with money?
If you’re worried about your financial situation, please know that you can get free, confidential advice from charities and organisations, including StepChange, MoneyHelper, Citizens Advice, and National Debtline.
*Little Loans uses soft search technology to help you look for a loan. This will not harm your credit score. If you’re matched with a loan and choose to make a full application with the lender, they will complete a creditworthiness assessment, which will include a hard search and/or an Open Banking check. A hard search will show on your credit file for up to 12 months. Multiple hard searches will harm your credit score.
**Payout times vary. Please ask your lender when your loan will be sent. How quickly the money shows in your account depends on your bank.
Representative example: Amount of credit: £1000 for 12 months at £123.40 per month. Total amount repayable of £1,480.77 Interest: £480.77. Interest rate: 79.5% pa (fixed). 79.5% APR Representative. We’re a fully regulated and authorised credit broker and not a lender