When you apply for a loan in the UK, the lender will check your credit history. That check helps them decide whether to lend to you and on what terms. Understanding how these checks work can help you avoid steps that may affect your credit file unnecessarily.
What is a credit check?
A credit check is when a lender or broker looks at your credit file to assess how you have managed borrowing in the past. In the UK, credit files are held by three credit reference agencies (CRAs):
Lenders may use one, two, or all three of these agencies. Each agency may hold slightly different information, so your credit score can vary between them.
What is the difference between a soft search and a hard search?
There are two types of credit check, and the distinction matters.
Soft search
A soft search is a preliminary check. It gives the lender a broad view of your credit file without leaving a visible mark that other lenders can see. Soft searches are typically used for:
- Eligibility checks before you formally apply
- Pre-approval or quote tools
- Identity verification
Running multiple soft searches does not affect your credit score and is not visible to other lenders.
Hard search
A hard search is a full credit check. It is recorded on your credit file and is visible to other lenders for up to 12 months. Hard searches are run when you submit a formal loan application.
If you make several formal applications in a short period, each hard search is recorded. A pattern of multiple hard searches in quick succession can be a signal to lenders that you are under financial pressure, and some lenders may factor that into their decision.
Be careful if you are shopping around for loans by submitting full applications to multiple lenders at once. Using eligibility checkers (soft searches) first is a safer approach.
A practical tip worth knowing: some lenders voluntarily publish which credit reference agency they use for their primary check. Checking this before you apply means you can focus on reviewing the credit file that the lender is most likely to see, rather than checking all three unnecessarily. It is worth looking at the lender's website or FAQs to see if they disclose this information.
Which agencies does your lender use?
Lenders are not required to tell you which credit reference agency they use, and practices vary. Some lenders do voluntarily publish this information, so it is worth checking the lender's website or FAQs before you apply. It can also be worth checking your credit file with all three agencies before you apply for a loan, so you know what a lender is likely to see.
You are entitled to a free statutory credit report from each of the three agencies. This right sits under the UK General Data Protection Regulation (UK GDPR) and the Data Protection Act 2018, which give you the right to request a copy of the personal data an organisation holds about you, known as a Subject Access Request (SAR). The ICO explains how to make a Subject Access Request, and MoneyHelper has guidance on accessing your credit report. The statutory report is a one-off snapshot of your file and will not affect your credit score. It is different from the ongoing free credit monitoring services offered by providers such as ClearScore (which uses Equifax data) or Credit Karma (which uses TransUnion data). Free monitoring services are useful for tracking changes over time, but they are ad-supported commercial products and may not show your full file in the same format as the statutory report.
Citizens Advice has further guidance on your rights around credit checking and credit files.
Why does this matter if you have bad credit?
If you have a low credit score or a thin credit file (meaning you have little or no borrowing history on record), understanding how checks work is particularly important.
- A hard search on an application that is likely to be declined still leaves a mark on your file.
- Multiple declined applications with hard searches in a short period can make future applications harder.
If you are unsure whether you will be accepted, using an eligibility checker first is usually the wiser step. These tools use soft searches and give you an indication of your chances without affecting your file.
It is also worth being aware that if you have been a victim of fraud, or if a lender suspects fraudulent activity, a CIFAS marker may be recorded on your credit file. A CIFAS marker can cause lenders to decline applications or request additional verification, even if your credit history is otherwise clean. You can check whether a CIFAS marker has been placed on your file by requesting a Subject Access Report directly from CIFAS.
How does this play out in practice?
Consider someone who was made redundant 18 months ago, missed two loan repayments during that period, and is now back in work and looking to borrow £5,000 to replace a boiler. Their credit file shows the missed payments and a hard search from a declined application they made six months ago. Submitting two or three fresh full applications at once would add further hard searches to an already thin file, potentially making each subsequent lender more cautious. A better approach in this situation is to use eligibility checkers across several lenders first, identify the one or two most likely to approve the application, and then submit a single formal application. The principle we would emphasise here is straightforward: avoid submitting a full application just to see if you will be accepted, and always use an eligibility checker first where one is available.
Does checking your own credit file affect your score?
No. When you check your own credit file, whether through a statutory Subject Access Request or a free monitoring service such as ClearScore or Credit Karma, it is recorded as a soft search. It is not visible to lenders and has no effect on your credit score. Only hard searches, triggered by formal credit applications, are visible to other lenders.
What to read next
- Understanding your credit report and score: this guide explains exactly what a lender will see when they pull your file, including how different types of information are recorded and weighted.
- Loans if you have bad credit: if you have already had a declined application or have missed payments on your record, this guide covers the options most relevant to your situation.
- Personal loans explained: a useful read before you apply, covering what lenders are actually looking for beyond just your credit score.
Sources
- FCA, Consumer credit: what you need to know, the FCA's consumer-facing overview of regulated consumer credit in the UK.
- MoneyHelper, guidance on credit checks and credit files, including hard search visibility periods.
- ICO, Your right to get copies of your data, explains Subject Access Requests under UK GDPR and the Data Protection Act 2018.
- Citizens Advice, Checking your credit file, consumer rights around credit checking and credit files.
- Experian, Hard and soft credit checks explained, information on how credit scores and searches work.
- Equifax, Hard vs soft credit checks, information on credit file access and searches.
- TransUnion, What is a credit check?, information on credit file access and searches.