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With a range of various loan types out there, it can be difficult to differentiate between them – especially if you’re new to the world of finance. But, what exactly are soft credit searches?

What is a soft search?

A soft search is where a lender will check your eligibility, in order to determine whether you are suitable for a loan with them. Soft searches allow the lender to check your credit report without it affecting your credit score. As an example, Koyo Loans is a lender that conducts soft searches to check your eligibility for a loan. However, it’s worth mentioning that Koyo Loans doesn’t just conduct a soft credit search to assess an application – they also make use of Open Banking data. 24.9% APR Representative.

These credit searches provide important information to lenders, which is collated by one of three credit bureaus in the UK:

  • TransUnion
  • Equifax
  • Experian

This info could include anything from your bill payments to more personal information, which is then pulled together and collated into a single credit score. There are a variety of ways your credit score can fluctuate (including too many hard credit searches and loan applications), so it’s important to keep your score as high as you can.

Why does my credit score matter?

While here at Koyo we make use of Open Banking information alongside your credit data, there’s no doubt that it’s important to ensure your credit rating is nice and healthy. There are a variety of big perks available to those with good credit ratings, including access to a wide range of products and services such as mortgages and credit cards. If your credit rating takes a hit, you might find it more difficult to be successful in your credit applications.

What are the benefits of a soft search?

One of the great things about a soft search loan application is that your credit score will remain unaffected. When you’re trying to build your credit profile, this can be very useful, especially if you’re interested in applying for multiple credit cards or personal loans. In fact, even if you don’t meet a lender’s eligibility criteria, you won’t damage your credit rating. 

What is the difference between a soft search and a hard search?

In contrast to soft searches, hard searches will leave a footprint on your credit profile through the application process, which can be seen publicly. Soft searches, on the other hand, are invisible publicly to other lenders and don’t have an impact on your credit score. That means you can apply for a personal loan without the worry of your credit score being impacted. When you’re looking to build your financial profile, this can be a huge help.

If you’re curious about a flexible personal loan provider that conducts soft searches of between £1,500-12,000, we’ve built a useful loan calculator to help you get a good idea of our rates. Submit an application at www.koyoloans.com. 24.9% APR Representative.

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