The general public is now paying more attention to their credit rating than ever before. First-time buyers and other consumer awareness of credit scoring appears to be higher than ever before, and a vast majority of people who get in touch with our team seem to have already reviewed their credit reports online.
There are numerous credit reference agencies to choose from, the two most common companies as Experian or Equifax. Still, we recommend to new clients to use Check My File for a 30-day free trial; following this, it comes to £14.99 a month but can get canceled any time. This report offers our clients a collation of information produced in an easy to understand color-coded report.
Often clients ask if our Mortgage Advisors in Doncaster will be doing a credit search on them because they are aware that too many searches can harm their credit score. The lender always runs credit checks, but our Mortgage Advisors in Doncaster will seek out the client’s permission before doing these.
Credit searches from banks come in two types you ether get a hard search or a soft search.
A hard credit search is an in-depth look at your credit report, and any financial institution carrying out one of these should seek your permission to do so. The advantage of a “hard” search would be that because the lender is looking into your situation quite carefully, if you pass the credit score, then it’s likely that your application will ultimately be successful. The only thing that can go wrong from then on is if, for some reason, you cannot provide satisfactory documentation to back up the information you have disclosed, or it turns out you have provided false details.
On the other hand, one of the benefits is that the hard search leaves a ‘footprint’ on your credit file so that anyone who looks at your report can see that it got carried out. Because it isn’t a bad thing, but for example, you have multiple searches included in your credit file in a short period, then it could be perceived as you are applying for a vast amount of credit at the same time. The footprint does not state whether your application was successful or not, but if you have done several searches over a few weeks, then lenders’ systems could assume you got declined.
The odd hard footprint on your record is no big deal, so this doesn’t give reason to worry too much about it; just take precaution in having too many.
A soft credit search is a ‘lighter’ search that looks at your financial situation. It would be the type of search that would be carried out on price comparison websites to let you know what may be available to you, or it could get used to verify your identity. Some Mortgage lenders carry out soft searches, and nowadays, even more, lenders seem to be changing to this type of search.
While less information gets offered to who is carrying out a soft search on you as opposed to what they would receive if it were a Hard search, if you obtain an Agreement in Principle from one of these, lenders would be handy.
A beneficial factor about soft searches is that while you will be able to see soft searches that got carried out on you. If you check your credit these searches are not visible to other Financial institutions like Banks, you can apply for an Agreement in Principle for a mortgage without it damaging your credit score irrespective of whether it is successful or not.
If you are thinking of making an offer on a property, our Mortgage Advisors would recommend having a mortgage agreement in principle in place before contacting the Estate Agent. You need to be able to give yourself the best possible chance of securing the property you want at the lowest possible price. If you present yourselves as having your finances in the right place, and then you are giving yourself the upper hand in the situation. Owning an Agreement in Principle could also mean that the Agent gets put off trying to ‘cross-sell’ their in-house mortgage services to you.