This is something that hypothetically says that the lender has ‘stepped’ inside your file and viewed your history for loans, current credit outstanding, your electoral roll status and whether you’ve had a County Court Judgment (CCJ), an IVA, or even been declared bankrupt.
For the majority of loans, the lender will carry out a credit check prior to approval. The lender will assess this information when determining whether you are eligible for a loan, and the maximum you are allowed to borrow.
The loan provider can only access your history of credit by paying for information from one of the UK’s credit reference agencies: Experian, Equifax and Call Credit who hold all of the data. Since all lenders need to use at least one of these three agencies, there will always be a record of the search footprint on the client’s record and this means that the most up to date information is always available.
Is it Bad to Have Too Many Search Footprints on my Credit File?
Search footprints will not negatively impact your credit score but they might impact your chances of being approved for a financial product.
Too many footprints on your credit file can harm your ability to get a loan because it will seem like you have been trying to aggressively borrow money in a short time span, and are therefore desperate for funds. It is never a good sign if someone is trying to borrow too frequently in a short period of time.
In actual fact – a number of searches within an hour or two might indicate fraud if someone has stolen your details and is trying to apply for quick finances wherever they can.
It is common to have about 12 searches on any file per year. If you have too few searches per year lenders might be cautious thinking that you are not very credit active and you might not have enough financial history to borrow money (common for young people with limited financial activity). There are some things that do not show up, such as paying rent and student loans do not show up on your credit score.
The bottom line is that having too many searches can impact your ability to be funded for the finance you need. In the past, online brokers would ask you to input your details and pass you onto numerous lenders, hoping that a loan might be funded. In effect, this actually led to numerous search footprints, which was not good for the individual. Fortunately, this practice is very much of the past and now you can see the popularity of eligibility calculators where you can enter information without it impacting your credit record.
How Long Will a Search Stay on my File?
According to Equifax:
- A simple application or quote will create a search footprint that will stay on your file for 12 months.
- Any debt collection search will last 24 months
- A loan that is fully funded, whether it was defaulted, or paid in full, will last 6 years.
How Does a Hard Footprint Compare to a Soft Footprint?
The two types of footprints are hard and soft.
A thorough credit search for a loan that stays on the applicant’s account for one year would be considered a hard footprint.
A soft footprint could be made on a spouse or partner of the key borrower, maybe because they have a joint mortgage or bank account.
A soft search will give the lender a good idea of the financial situation. If they find that the partner is actually in a lot of debt, it could indicate that they are applying on their behalf or they need money to help their debts.
It is considered ‘soft’ because it will instantly disappear from the file of the person that is searched and will not impact their approval for future products. This is fair, as they never actually applied for credit in the first place.
How Can I Access Information About My Credit File?
You can check your file through credit reference agencies and sites like Checkmyfile and Noodle. Some companies offer trials up to 14 days and the government also offers a statutory report for £2. There is also the option to pay a few pounds per month for a monthly membership that will send you alerts and updates if there is any change to your file.
By having access to your file means you can see how many search footprints you have at any given point. This will help you determine whether this is impacting your ability to get approved for loans. When it comes to fraud they will email or text you if there are any suspicious activities on your account – this is very useful.
You will also be able to view your credit score which is essential when applying for mortgages, credit cards or loans. If you are using different methods to improve your score such as paying off debt on time or using a credit builder credit card, you can also monitor your progress.
