Soft vs Hard credit search

[rsbmw]

I know the difference between these from a customers perspective, but what is the difference to a lender? I presume a hard search would show more information?

[Sarnie]

Yes, soft search would usually return high level generic information such as "are any CCJ's present" etc etc. Leaves no footprint on your credit file.

Hard search will return account conduct and history, balances, credit limits, closed account data, electoral roll information, financial associates etc..............and will leave a search footprint on your credit file.

[rsbmw]

Cheers Liam

[goingonholiday]

There are some rules the lenders need to adhere to when undertaking hard vs soft searches. If they want to they can see the same information on both but they obviously have to pay the credit reference agencies for that data. Taking a mortgage as an example, a lender may search you multiple times during the course of your application, they should only be leaving one footprint. They may leave a footprint when you apply but then do a soft search atvaluation to makesure nothing has changed.

They may also offer a soft option to give you an exact price eg on a personal loan with a "personal apr" then convert that soft search if you take up the offer.

[sanf]

Sarnie said:

Yes, soft search would usually return high level generic information such as "are any CCJ's present" etc etc. Leaves no footprint on your credit file.

Hard search will return account conduct and history, balances, credit limits, closed account data, electoral roll information, financial associates etc..............and will leave a search footprint on your credit file.

Sorry this is generally incorrect (although there is some blurring of lines). You are referring to the data that the lenders are entitled to see and the purpose of the search when it is undertaken.

Defining soft vs. hard is also key.

Generally soft/hard searches are thought about when credit is being applied for. In this scenario the data available in both searches is exactly the same. However the soft/hard changes were brought in so that if a broker (or a online search engine) is looking for the best deal and submits your details to 5 companies rather than leave 5 credit application searches, they leave a 5 soft credit search - but can still see all the data they are entitled to as a business. It allows a decision in principle to me made. These are known as Credit Quotation Searches.

What should then happen is; if the individual chooses to accept one of the companies offer of finance said company should then 'resubmit' the search this time with a 'hard' credit application search - that way the company leaves an official credit search footprint. It was done to stop credit scores being adversely affected by multiple searches. Also as a general rule - soft searches are not visible to other lenders, only us consumers, where as the credit app 'hard search' will be visible to other lenders.

Beyond that however - there are different search types which can also be considered 'soft', and less data is returned, although these are not actually credit searches - they are searches such as ID Verification, Anti Money laundering, Insurance quotation, Trace searches. All of those use differing levels of data and are generally regarded as soft.

The 3 CRA's have slightly different views on search footprints and exact definitions will differ slightly between them. Therefore take the above as a general view.