Hard vs Soft Credit Checks

How Do Credit Checks And Credit Health Affect Mortgage Applications?

Have you ever wondered how your past financial decisions could impact your dreams of owning a home? In the evolving world of UK mortgage applications, understanding the difference between hard and soft credit checks is important.

These checks are integral to a lender’s assessment of creditworthiness, and differ in their impact on credit scores and visibility on credit reports. 

This article, initially focusing on the differences between these checks, discusses their influence on mortgage rates, tips for improving credit scores before applying, insights into credit reports, and specific guidance for first-time homebuyers. Let’s get stuck in. 

Hard vs. Soft Credit Checks: What is the Difference?


Hard Credit Checks

Hard credit checks are thorough reviews of your credit history, usually conducted by lenders when you’re finalising major financial applications, such as mortgage applications, credit card applications, personal loans, or car financing. These checks can slightly lower your credit score, as they indicate an application for new credit, which can be interpreted as increased financial risk. While the impact of a single hard check is usually minor, multiple checks over a short period can raise red flags for lenders, suggesting potential financial distress. These inquiries are visible on your credit report for up to two years, but their influence on your credit score diminishes over time. Lenders use the results of these checks to gauge your creditworthiness, which directly influences their decision-making process in approving loans or credit.


Soft Credit Checks

In contrast, soft credit checks are less invasive and often used for preliminary assessments like loan pre-approvals or credit card offers. Employers, for background checks, and utility companies, for identity verification, also conduct soft checks. Importantly, these checks do not impact your credit score, making them a non-risky option for initial screenings. Soft checks are recorded on your credit report, but they are only visible to you, ensuring that your exploration of new credit options doesn’t negatively impact your creditworthiness in the eyes of lenders.


Improving Credit Score Before a Mortgage Application

Prospective borrowers should take proactive steps to enhance their credit score. This includes timely bill payments, reducing outstanding debts, and avoiding new credit applications in the months leading up to the mortgage application. For those with no credit history, it is recommended you start building a credit profile through small, manageable loans or credit cards. This is important, as lenders use your credit history to gauge your financial conduct. 

Additionally, maintaining a low credit utilisation ratio and keeping long-standing credit accounts open can significantly boost your score.


Understanding Your Credit Report

Your credit report is compiled by companies known as credit reference agencies (CRAs). There are three CRAs in the UK: Experian, Equifax and TransUnion.

Regularly reviewing your credit report is important. It helps you to identify any discrepancies and understand factors affecting your credit score overtime. It is recommended to check your report annually (or even more often) for errors, and to dispute any inaccuracies with credit bureaus. 


Credit Checks for First-Time Homebuyers

First-time homebuyers should approach credit checks with care. Starting with lenders who perform soft checks for initial mortgage estimates can help maintain good credit standing. A balanced approach to mortgage preparation involves not only managing your credit, but also ensuring that you prioritise other factors, such as income stability and employment history, all of which play a role in mortgage approval.




Homeownership is deeply intertwined with credit management. Understanding both hard and soft credit checks is important, regardless of whether you are a seasoned investor or first-time-buyer. In fact, it is important knowledge, even if you don’t plan to buy a house at all! 

The guidance of a mortgage adviser can help you understand the impact of credit checks on your mortgage application, but also help develop a comprehensive strategy that includes improving credit scores and navigating other financial aspects around your mortgage. A well-informed approach to credit checks, complemented by the expertise of a mortgage adviser, not only safeguards your credit score, but also opens doors to better mortgage options. 

As the industry continues to evolve, one thing that will not change will be to stay informed and proactive about your credit health, which remains the cornerstone of successful mortgage applications. Get in touch for personalised advice. 




Status Mortgage Services is a trading style of Status Financial Services Limited (Company number 08983516) which is an appointed representative of the Openwork Partnership, a trading style of Openwork Limited which his authorised and regulated by the Financial Conduct Authority.

Approved by The Openwork Partnership on 30/01/24