Soft Credit Check Loans

What are Credit Searches?

Lenders perform a credit check on a borrower’s profile when they apply for a loan to assess the loan eligibility and to calculate the chance of default. The credit check they conduct gives them a detailed history of all your past personal finance management. How many loans have you availed, lenders who had declined your loan request in the past, how many times have you failed to make any repayment, such details are recorded by the Credit Reference Agencies on your report. The lenders access these details as this helps them to take a clear decision.

Different Types of Credit Checks

Generally, a lender or credit provider requests any of the Credit Reference Agencies to send in the examined details of a borrower’s credit history. The inquiry made by the lender or credit provider is recorded on the report and it impacts the credit score.

There are 2 different types of credit searches – hard credit check and soft credit checks. Both the checks have their set of pros and cons and they both have different processes for a check.

What is Soft Credit Check?

A soft credit check allows a lender to conduct a formal review of your credit report without impacting your credit score. That means the inquiry made by them is not visible when other lenders check your credit report. If a lender conducts a soft credit check on your report and then another lender does the same, the latter one will not be able to see the footprint of the first one. This check doesn’t leave any footprint on your record and hence, your score is not damaged.

Soft credit check loans are not any specially designed credit product. The short-term loans for which the lenders run a soft credit check to offer an initial quote are known as soft credit check loans.

What is Hard Credit Check?

A hard credit check allows a lender to perform a complete and thorough review of a borrower’s credit profile. Multiple hard enquiries in a short period of time can become an alarming concern for the lenders. This type of credit check always impacts the borrower’s credit score. All the enquiries are recorded on the report and hence, any lending agency reviewing your profile may see where all had you applied for a loan and how many lenders turned your loan application down.

Just before the final approval, lenders carry out a hard credit check as mandated by the FCA to gauge the financial behaviour of the borrower before lending any money.

What are the Advantages of an Online Soft Credit Check Loan?

If you do not have a spotless credit history, then borrowing a loan with a soft credit check may prove to be beneficial for your financial health. There are many associated benefits of using a short-term loan with a soft credit check and they are listed below:

• 1. Convenient: The method of application is easy and convenient. A borrower does not have to spend much time to avail a personal credit with Oyster Loan. The application form will need 2-3 minutes to be filled up.
• 2. Soft Quotes: Without any impact on your credit score, you will get the idea of the available interest rates.
• 3. Fast: Availing a short-term loan is relatively faster than any other secured borrowing. If your loan application is approved by the lender, the amount may be disbursed to your account within a few minutes.
• 4. Regulated: Borrowing a personal loan from FCA regulated lenders or through credit brokers are considered to be safe.
• 5. Documentation: Applying for such credit products require nominal documentation and that too will be carried online.

Soft Credit Check in the UK- Leaves no imprint on your credit report

Please note that Lenders do not consider a credit score as the only deciding parameter for loan approval. They prefer to assess the borrower’s creditworthiness before giving any approval. For people with a bad credit history, the lenders assess their loan eligibility and then make the decision regarding the application. Soft credit check done by brokers/lenders won’t leave any imprint on your credit report.

The financial regulator of the UK – the Financial Conduct Authority (FCA) has made it mandatory for its authorised firms to run credit checks on the borrower’s profile to promote responsible lending. You may avail a soft credit check loan with bad credit, the lender will offer you soft quotes, if you agree to go ahead with anyone out of them, then before the final approval, a hard credit check will be conducted by the lender.

Improve your Credit Rating online – With Oyster Loan

A credit score doesn’t improve overnight. If you decide to borrow a payday loan with a soft credit check, and you repay the loan amount on time regularly, the lender will report this to the Credit Reference Agencies and once the agencies receive the reports, your credit score will improve.

We offer a range of personal loans and help borrowers to meet the right lenders for their credit requirements.

Oyster Loan is an FCA registered credit broker that operates across all the major cities of the UK. All the lenders that we deal with are also licensed by the Financial Conduct Authority. We promote responsible lending to maintain standard industry practices – that is fair and transparent.