Types of credit check - a handy guide

A credit check is when a company or third party looks at your credit report to find out about your history of borrowing and managing credit. There are 2 main types of credit check lenders might complete:

  1. Quotation search or soft credit check - these are usually used to check your eligibility before a full application.
  2. Full credit check - searches to complete a full credit assessment, commonly used for all credit applications.

What is a credit report?

A credit report is a record of information about your credit history which shows lenders how you’ve handled borrowing in the past. It helps them assess your level of risk when deciding whether to lend to you.

Every aspect of your borrowing history, like how well you’ve paid back debts in the past, is factored in to your credit report, which helps lenders make a decision.

What is a soft credit check?

A soft credit check is a quick search that gives lenders a basic view of your credit history, rather than the full report. Soft searches don’t affect your credit score and are usually made when:

  • A lender wants to check your eligibility to apply for credit.
  • An employer needs to verify your identity before hiring you.
  • You apply for a pay-monthly insurance policy.
  • You want to see your own credit report and credit score e.g. using services like Clear Score, Credit Expert or Credit Karma.

Although you can see footprints of soft searches on your credit file, other lenders won’t take these into account when deciding whether to lend to you.

What is a full credit check?

A full, or hard, credit check is a thorough credit report assessment, usually carried out by a lender when they’re deciding whether to accept your application. Full searches tend to be made when:

  • You apply for credit such as a mortgage, a credit card or a loan.
  • You take out finance on things like a new car or sofa.
  • You open a new utility account or a mobile phone contract.

These searches are fully visible to other lenders, and too many can affect your ability to get credit.

Do credit checks affect your credit score?

A soft credit check won’t affect your rating, as lenders don’t take these into account when reviewing your credit application. You can have lots of soft searches on your credit report without it having an impact on your overall score, which means you can shop around for the best offers.

A full search could have an impact on your credit score, especially if you have a lot of them in quick succession. Lenders might think you’re desperate for credit, so be careful not to record too many. Searches can stay on your credit report for 12-24 months, depending on the particular credit reference agency.

What other factors affect my credit score?

Every lender has its own scoring system, but you’ll usually score higher if you’re:

  • Employed in the same job/at the same company for a long time.
  • A homeowner or have lived for a while at the same address.
  • Able to show you’ve been able to make repayments on previous borrowings.
  • Registered to vote.

Your credit score will play a big role in your financial wellbeing, so take time to build it. You’re more likely to be approved for credit and get the best possible terms and rates if you do. 

Find out more about credit reports here

Important: the content on this page is not intended to be taken as financial advice or recommendation made by MBNA. You should seek independent financial advice if unsure about your financial needs.