Car finance with a soft credit check
When applying for car finance, you might come across the term ‘soft credit check’. But what is a soft credit check, and how does it impact your chances of approval?
This guide will explain everything you need to know about a car finance soft search, including how it works and what it shows.
What is a soft credit check?
A soft credit check – also known as a soft credit search, or a soft search check – is a way for lenders to check your credit history.
Lenders use soft searches to get an overview of your credit history without leaving a visible mark on your credit report. Unlike a hard credit check, which is recorded on your credit report and can affect your score, a soft search is only visible to you and will not impact your credit score.
A soft credit check can often be the first step in the approval process for getting car finance. If you are approved in principle, the lender will likely carry out a hard check before fully approving you and releasing the funds.
What does a soft credit check show?
A soft credit check gives car finance lenders a snapshot of your credit history. But what exactly does a soft search show? It may include the following:
Your personal details, including your name and address history
A record of your current credit accounts, e.g. bank accounts, loans and credit cards
Any outstanding debts
Your repayment history, including any missed or late payments
Public records of County Court Judgments (CCJs), bankruptcies, and Individual Voluntary Agreements (IVAs) from the past six years
If you have joint credit with a spouse or partner
Unlike a hard check, a soft search may not show detailed account information. Crucially, it also won’t impact your ability to apply for finance elsewhere, or be visible to any other lenders or insurers.
What information is needed for a soft credit check?
If you're applying for a car finance soft search, you'll typically need to provide:
Your full name
Your date of birth
Your current address
Employment details
This information could help lenders to assess your history without carrying out a full credit check.
What is the difference between a hard and soft credit check?
A soft credit check is a quick look at your credit report that doesn’t affect your credit score. It’s sometimes done if you check your own credit report, if a company checks your eligibility for a product, or if an employer does a background check. A soft credit check is only visible to you, so a lender wouldn’t be able to see this.
A hard credit check is a full check of your credit history that happens when you apply for credit, like a loan or car finance. This can affect your credit score and will be visible to other lenders.
In short:
Soft check: Does not impact your credit score and is only visible to you. Sometimes used for eligibility and background checks.
Hard check: Leaves a mark on your credit report and is visible to lenders. Carried out when you officially apply for a loan or a product.
Do soft searches affect credit score?
No, soft searches do not affect your credit score at all. Soft searches are not visible to other lenders. This means they can't impact your credit score or influence future credit decisions.
Even if multiple soft searches are done, they will not harm your chances of getting credit in the future because they do not leave a "mark" on your file or affect your score.
Our car finance soft credit check process
When you apply for car finance with us, we’ll carry out a soft search to show you your finance options. It helps us get an idea of how you’ve handled loans and credit in the past.
If you choose to proceed, the lender will conduct a hard search which may impact your credit score.
Here’s the full process:
Soft credit check: We first perform a soft credit check, which doesn’t affect your credit score or appear on your report. It helps us understand your credit history.
Initial approval: If you're approved in principle, our account manager will call you to explain your finance options and help you find the best deal.
Hard credit check: A hard credit check is only done once you decide to move forward with a specific finance option. Keep in mind that multiple hard checks in a short period can lower your credit score, and will be visible to other lenders.
If you’re worried about your credit score, it doesn’t necessarily mean the end of the road. We work with lenders who specialise in bad credit car finance, and could still be able to offer you a deal, even if your credit history is complex. Credit is subject to status.
Give us a call if you have any questions. In the meantime, be sure to read our guide on how to improve your credit score to ensure your score is in the best position before you apply.