We all know about credit scores and reports and how many financial companies can look at our reports when considering whether to lend us money or not. But do you truly know what happens when they delve into your financial affairs? We thought it a good idea to take a look at what happens when you apply for credit.
Soft Checks
Banks and lenders do a’soft’ check on your credit report when you peruse your offers online. This type of search has no impact on your credit score and allows us to show you how likely you are to be accepted for that particular offer.
As a result, you can look at your offers as much as you want without jeopardising your credit score. It’s a good idea to check back frequently because your offers are constantly changing.
What Happens When You Apply For Credit – Full Credit Applications
When you apply for credit, a bank or lender will perform a “hard search” on your credit report. This indicates that a lender will examine your entire credit report before deciding whether or not to accept your application.
Whether you’re accepted or not, a rigorous search can cause a short drop in your credit score. There’s no need to be concerned. Your credit score will improve as you utilise credit and make regular payments, and it may even grow if you have a solid payback history.
Just make sure you don’t apply for a lot of credit in a short period of time, as this will have a significant influence on your credit score.
Who Can View My Credit Report?
Only the persons you authorise to see your credit report have access to it. When asking for credit, this is usually a component of the procedure.
With your agreement, other organisations and institutions can scan your credit record as part of an identification check or to obtain insurance quotes. Other lenders will not be able to see these searches because they are soft searches. Nevertheless, there are a large number of institutions that can view and assess your credit report. Lenders, banks, employers, mobile phone companies more. Your report is certainly not top secret!
Can I See Who Has Viewed My Report?
Yes. And normally you can see such searches for up to two years. What’s more, if you are a member of one of the credit agencies, they should send you an alert when a search is carried out. Normally this will be done via email. If you do not recognise a search, or are suspicious about activity on your report, always get in touch with the agency. You need to check regularly in case of fraudulent activity.
What Happens When You Apply For Credit – You Control Your Destiny
At the end of the day, it is natural for companies to have access to your credit file. There is nothing to be upset or nervous about unless you are trying to hide something. If you are not, then do not give it much thought. Just ensure you pay your bills on time, and that your report does not contain any mistakes, and you will be fine.
