In the modern day, we tend to find that most people, whether they are a homeowner, a home buyer or just a regular renter, are far more tech and finance savvy, compared to their predecessors. This extends to checking and improving credit ratings.

Overall consumer awareness of credit scoring seems to be much higher than it has been in previous years, likely thanks in large part to the sheer volume of free information available online, as well as the various credit checking tools we have access to from our phones.

To give a general estimate, we’d say at the very least that around half of the customers that get in touch with us, have already taken the necessary steps to check and download their credit report, ahead of enquiring for mortgage advice in Halifax.

There’s lots of different credit reference agencies you can take a look at if this is something you are wanting to do, with the most well-known brands being Experian and Equifax.

Our own recommendation would be Check My File, as they give a 30-day free trial, which is £14.99 a month thereafter and can be cancelled at any time. The benefit of this particular tool is that it collates information from several sources, such as the aforementioned ones, to create one consistent report.

Try it FREE for 30 days, then £14.99 a month – cancel online anytime.

Will you perform a credit check on me?

Customers always ask us if we are going to be doing any type of credit search on them. This goes back to that overall consumer awareness being at an all-time high, with many people being fully aware that too many credit searches can have a negative effect on their credit score.

As a mortgage broker in Halifax, we personally will not be running a credit check on you. What will happen though, is a mortgage lender will run their own credit check on you, to deem whether you match their credit criteria for the mortgage deal you are applying for.

You will not be credit checked by a mortgage lender without us asking for your permission first, however, so you will not need to worry about that.

There are two main types of credit search that a customer could find themselves subject to; A hard credit search and a soft credit search.

Soft credit searches are typically the most common type of credit search you’ll come across nowadays, as it will be unlikely to leave a footprint on your credit report, though it will mean they are getting less information from you in doing so.

Soft credit searches are more commonly encountered when you take a look at price comparison sites so that you can see the sorts of products that could be available to you. They’re also the sort of credit searches that can be used as a means to verify your identity.

Whilst a large portion of mortgage lenders are switching to this these days, there are still mortgage lenders who will perform a hard search and even some who start off with a soft search, but then follow up with a hard search.

Even though soft searches give the mortgage lender less information about you than would otherwise be gotten from a hard credit search, if you get an agreement in principle from a mortgage lender that has taken out a soft search, it is still a fairly good indicator that you will be accepted at full application stage.

What makes soft credit searches good?

Soft credit searches are highly favoured by credit-savvy individuals, with very good reasoning. Whilst these searches allow you to see that a company has checked your credit (you might be surprised by how many have done so), they remain invisible to other financial institutions.

The benefit of this is that when a lender utilises soft credit searches, you can confidently apply for an agreement in principle before obtaining a mortgage, knowing that your credit score likely won’t be affected, whether your application is successful or not.

Obtaining an agreement in principle becomes especially important if you’re a first time buyer in Halifax and are considering making an offer on a property. Having this initial approval gives you the best chance of securing a property, while also presenting your finances in a positive light.

In addition to this, possessing an agreement in principle demonstrates to the estate agent that you’re a serious and well-prepared buyer, further deterring them from attempting to cross-sell their in-house mortgage services to you.

By leveraging the advantages of soft credit searches and securing an agreement in principle, you position yourself as a strong contender in the property market, with the added assurance that your credit score remains intact throughout the process.

A hard credit search involves a detailed analysis of your credit score and does leave a visible credit footprint. Consequently, any financial institution conducting such a search should seek your explicit permission beforehand.

The benefit of a hard search lies in its thoroughness, making it a strong indicator of your potential success at the full mortgage application stage if you pass their checks and are agreed in principle.

From that point onward, the key to mortgage success rests on your ability to provide the necessary documentation to support the information you’ve provided. Any false information could adversely affect your chances.

Failing the credit scoring process with a hard search can significantly harm your credit score and hinder future credit applications, particularly if you experience multiple failures in a short period.

Other financial institutions can view the credit footprint left by a hard search, although it doesn’t specify whether it was successful or not. The presence of multiple hard searches on your file may lead lenders to question your creditworthiness and view you as a higher risk.

While occasional hard footprints are not inherently negative, it’s essential to be cautious about having too many of them.

If you’re moving home in Halifax or going through a remortgage in Halifax, there’s a possibility that a hard search may have been performed on you, depending on your specific situation.

Date Last Edited: January 15, 2024