Credit Checks: What Is A Hard Search?

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Credit Checks: What Is A Hard Search?

Following on from our previous post about what things to look out for on your credit file, we are now going to explain what is a hard search, why they appear on your file and more.

What is a Hard Search?

When a lender looks at your credit score and file in-depth, this is called a HARD SEARCH.
When this type of search happens, a mark is left on your credit file meaning that other lenders can also see that you applied for credit recently – whether or not you were accepted.

Generally, a hard search will stay on your file for around 12 months, although debt collections can stay visible for as long as 2 years.

Why do they appear on your file?

There are two main reasons why you will see a hard search entry on your credit file:

  • You have applied for credit, such as a credit card, loan, mortgage, or store credit.
  • You have applied to open a new utility account, including mobile phone contracts.

You can ask your provider to inform you whether they make soft or hard checks before they carry out a search so you are aware of how this could impact your file and credit score.

Hard Searches – The Impact

When you apply and you have a hard search added to your credit file, it is very common for your score to be impacted. However, this is not usually a problem as long as you continue to borrow responsibly, and you ensure your repayments are made on time and are kept up to date. If this happens, the impact of hard searches will only last short term.

If, however you make several credit applications in a short period of time, you may cause further damage to your credit score – this is due to the fact that lenders will see multiple hard credit checks as a sign you may be struggling and possibly in financial difficulty.

If this does happen and you are accepted, you may find that due to your recent credit history you may be offered credit at a much higher interest rate.

Can Hard Searches be removed?
No – hard searches can’t be removed from your credit file, however, most will drop off your report after a year. But if you notice a hard search on your report that you don’t recognise, you may be the victim of fraud – if this is the case, the lender should be able to correct any damage caused.

Reducing the Impact of Hard Searches
If you do need to make credit applications, a general good rule of thumb is to space these applications out so there are not all happening at the same time. As mentioned previously this could look to some lenders like you are in financial difficulty and could cost you in terms of the credit you can receive.

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