A soft credit check is a preliminary review of your credit history that does not affect your credit score. Unlike a hard credit check, it leaves no visible mark on your credit report for lenders, landlords, or employers to see; only you can see that one has been carried out. If you have been turned down by a high-street bank and you are worried that every enquiry is making things worse, understanding this distinction matters. A soft credit check lets lenders (and you) gauge creditworthiness without adding further hard searches to your credit profile.
How Does a Soft Credit Check Work in the UK?
Lenders carry out soft credit checks in the first stages of an application to assess the applicant’s creditworthiness. These checks allow lenders to gather basic information about the applicant’s credit history and determine the likelihood of them being a reliable borrower, making repayments on time, and the likelihood of default.
Soft credit checks do not delve into a credit report in any great depth. Think of them as a cautionary glance rather than a deep investigation. They give lenders enough information to decide whether it is worth progressing to a full application, without triggering the consequences that come with a hard search.
In the UK, the three main credit reference agencies, Experian, Equifax, and TransUnion, all distinguish between soft and hard searches. A soft credit check in the UK works the same way regardless of which agency a lender uses: it records the enquiry on your personal file, visible only to you, and has zero impact on your score.
What Does a Soft Credit Check Show?
It typically reveals a snapshot of your financial standing rather than a full deep dive. This includes your credit utilisation rate (how much of your available credit you are currently using), a summary of your credit history, any recent enquiries, and basic personal information such as your name and address linked to credit accounts.
What it does not show is the level of detail you would find in a hard check. A soft search will not pull up the full terms of every credit agreement, detailed payment histories on individual accounts, or the kind of granular data a lender would need before making a final lending decision.
For business owners who have experienced a CCJ, a CVA, or even a winding-up petition, it is worth knowing that a soft check may still flag these markers.
Soft Credit Check vs Hard Credit Check: What Is the Difference?
A soft credit check does not affect the applicant’s credit score and does not appear on their credit report for other parties to see. Only the applicant can see that a soft check has been carried out. These checks enable lenders to evaluate an applicant’s credit history without impacting their credit score.
A hard credit check is recorded on your credit file and is visible to anyone who searches it in the future, other lenders, mortgage providers, and even some landlords. When a lender performs a hard credit check, it can negatively affect the applicant’s credit score. This is particularly true if multiple hard credit checks are carried out within a short period. Each one signals to future lenders that you have been actively seeking credit, which can raise concerns about financial stability.
| Soft credit check | Hard credit check | |
| Affects credit score | No | Yes |
| Visible to other lenders | No | Yes |
| Visible to applicant | Yes | Yes |
| Risk from multiple checks | None | High |
| Signals credit-seeking | No | Yes |
| Evaluates credit history without any impact on your score. | Recorded on your credit file and can raise concerns about your financial stability. |
This is why it is crucial to be mindful of how often hard credit checks are performed. It is better to only authorise them when necessary, ideally once you have already had positive signals from a soft check and are confident about proceeding with a full application.
Why Soft Credit Checks Matter When You Have Been Declined
Every rejected application that involved a hard check is visible on your file, and a cluster of them in a short window can make the next lender even more cautious.
Soft credit checks remove this problem entirely. Borrowers can explore funding options without worrying about their credit score being negatively impacted. Soft credit checks are not visible to anyone other than the applicant, which means that no other entities, employers, landlords, or other lenders can see that a soft check has been carried out.
How Funding Bay Uses Soft Credit Checks
At Funding Bay, the process is designed to minimise unnecessary stress. As an FCA-authorised commercial finance broker, we help SMEs raise funding across a range of products, from invoice finance and asset finance to bridging loans and unsecured business loans, working with a network of over 200 lenders within the traditional and alternative finance markets.
For business owners dealing with adverse credit, this approach matters. This helps narrow applications toward lenders whose criteria are more closely aligned with the business. At Funding Bay, we work with Creditsafe when doing credit checks. Creditsafe is a credit reference agency that pulls data from public records, filed accounts, payment behaviour, and legal filings to generate a score that represents how creditworthy your company appears to lenders. They score businesses from 0 to 100, with a higher number indicating lower insolvency risk.
Key Takeaways for SME Owners
Soft credit checks are an essential part of the loan application process, but their real value becomes clear when you are in a difficult position. They enable you to understand your standing, explore alternatives, and make informed decisions without compounding the problem.
Before applying directly to another lender, speak to a broker who can check lender fit first. This reduces the risk of unnecessary hard searches and helps you approach the right lender from the start.
