Just like applying for a mortgage or increasing your bank borrowing limit, seeking approval for car finance often calls for a soft credit search. So, what is a soft search credit check? Carried out by the lender, a car finance soft search is designed to determine your eligibility for credit. This information is used to build a credit profile and establish if you’re a suitable applicant.

Ultimately, soft searches help to answer questions like how much to lend and at what interest rate, as well as whether you’re eligible for any special deals or rates. Want to know more about car finance soft searches? Read on as we answer all your burning questions, including what does a soft search show, where does the financial information come from and whether there are any benefits of soft search.

What is a soft search?

Also known as a soft credit check, soft searches reveal your personal financial history without leaving a footprint on your credit report. They allow lenders to follow up and confirm information you have offered which is used to generate a quote.

What does a soft credit search show?

One of the biggest questions asked by car finance applicants is what do lenders see on a soft search? The short answer is a snapshot of your personal credit profile. This includes information such as credit card limits, phone contracts, mortgages, personal loans and any other relevant material that helps determine whether you’re likely to pay back the loan. If you have a County Court Judgment (CCJ) court order registered against you for failing to repay money this will also appear.

What does the ‘soft’ mean?

While car finance soft searches do reveal valuable information, they don’t leave a signature on your credit profile. Instead, soft searches remain invisible to third parties and lenders, and are only visible to the applicant.

What are the benefits of car finance soft search?

One of the major benefits of car finance soft searches is the invisible footprint. They offer lenders a snapshot of your credit history and score without leaving a permanent mark on your personal report.

While hard credit searches are not necessarily a burden, having too many appear on your report can spook prospective lenders and imply you’re in constant need of credit. Hard searches that don’t result in approval can be particularly dangerous as they suggest you’re credit hungry but haven’t managed to win over any lenders due to bad credit history.

On the other hand, soft searches are designed to give car finance lenders peace of mind while keeping your credit report clean. So, when applying for finance there’s no reason at all to hold back on a soft credit search.

Will a car finance soft search affect my credit report?

The answer to this question is a firm no. While a soft credit search car finance check will reveal information on your credit history, it won’t leave a footprint on your file and your rating will remain unaffected.

Where does car finance soft search information come from?

In the UK, lenders generally use three major credit reference agencies to determine your credit score – TransUnion, Equifax and Experian.

Can soft credit search car finance help me?

While the concept of credit checks can be intimidating, if you’ve got nothing to hide, they can actually help you secure a better deal on your loan. At My Car Credit, our applicants fall into one of two categories – prime or subprime. Applicants with good credit status fall into the prime category and are offered a transparent actual annual percentage rate (APR) or ‘real rate’ upfront.

If you have a compromised credit history, you’re still eligible. There’s just a little more work to be done before securing a loan. Using your application details, our team work hard to find a suitable deal from our panel of more than 34 lenders.

Car finance soft searches also empower you with the freedom to shop around for a good deal before making your final decision on a lender. While hard searches could have a negative impact on your credit history, soft searches allow you to seek pre-approval for loans without leaving a mark on your credit history.

What’s the process?

Less formal than a hard credit check, soft searches are designed to be quick, easy and stress free. At My Car Credit, we start by asking you to calculate car finance and then complete a short online application form. This shouldn’t take more than a few minutes and covers details such as your name, address, employment history and date of birth.

Once the form is completed, we’ll run a quick check and let you know the results online, as well as via text and email. Everything is transparent and we’ll never carry out any searches without your permission.

Do bear in mind that once you decide to proceed with your application, some lenders will perform a hard search.

Is there a fee?

At My Car Credit, we don’t believe in charging for the soft search application process. There are no extra charges associated with our soft credit search and typically the results will help you find the right deal for your circumstances.

The final verdict

Ultimately, a car finance soft search is a great way to reassure a lender and secure a loan without compromising your credit score. With no fee, no footprint and the potential to unlock excellent rates, there are virtually no downsides to carrying out a car finance soft search. A win-win for applicants and lenders.

Still have more questions on what a soft credit search is? Reach out to the team at My Car Credit to find out more about how a car finance soft search can help you secure the best possible loan.

Whether you have a glowing credit record or are struggling with black marks like debt or a CCJ, our team is on hand to help you secure finance and get behind the wheel of your own car as soon as possible. We’ve also built a huge library of help and advice articles covering everything from how to improve your credit score to adhering to social distancing rules when purchasing a car during the COVID-19 pandemic.

 

Representative APR 24.6%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 24.6%, annual interest rate (fixed) 24.57%, 47 monthly payments of £237.00 followed by 1 payment of £247.00 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £3,886.00, total amount payable is £11,386.00.

My Car Credit is a credit broker and not a lender.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!