How important are credit search footprints?

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When it comes to a credit search footprint, many of us are not so completely sure what it is nor its significance. Here we provide an overview as to what a credit search footprint actually is and what it means for you when applying for a loan or other types of credit.

What do credit search footprints involve?

Each time lenders want to carry out a credit check (in order to accept or decline your application) they retrieve this information through one of the three main credit references agencies: Equifax, Experian and Callcredit.credit-reference-agencies

Every time a search is carried out, a ‘footprint’ is then left on your file. This is a method of confirming that the credit check has taken a place, and a way of letting both you and other lenders know that your file has been looked at.

In terms of the information that credit check references will be looking at on your file, it will include:

  • Your full name and date of birth
  • Your current address and previous addresses you have lived at, obtained through the electoral register
  • Any outstanding debt you have
  • County Court Judgements and if you have previously been bankrupt
  • Your current account overdraft and balance
  • Any loans (including payday loans), credit card or mortgage accounts that you have currently open,
  • Accounts you have closed in the past six years will also be on your file.

What is the duration of a credit search footprint?

There are different lengths of time in which a credit search footprint remains visible on your credit file as it depends on the type of application you have made:

  • 1 year if you have made a credit application
  • Up to 2 years for searches made by debt collectors
  • 6 years for a funded loan, whether defaulted or paid in full

Types of credit search footprints

There are two types of credit search footprints: hard and soft, and each has different implications. Let’s take a look at what each one means.

What are soft credit search footprints?

A soft credit search footprint doesn’t have a long term impact on your credit score or file. It usually involve credit reference agencies looking at your credit file but a soft credit search footprint usually remains on file for less than a year.

What are hard credit search footprints?

On the other hand a hard credit search footprint means that it stays on your credit file for typically over a year. A hard credit search footprint is usually carried out for applications for involving considerable long-term commitment such as mortgages or credit cards.

The main thing to take away from either of these footprints is that regardless of whether your application is approved or declined, the credit search footprint will always remain on your credit record for at least some period of time.

Are credit search footprints good or bad?

The credit reference agency Equifax states that is is normal to have up to twelve credit search footprint on your record on a yearly basis. Generally speaking, there is nothing wrong with having credit search footprints on your credit file.

Nevertheless, having too many credit search footprints could affect your chance of being accepted for an application for a loan or credit. It can suggest to lenders that you are desperate for cash and are experiencing a financial emergency. This may suggest to them that you won’t be able to keep up with repayments at a later date.

If you want to check just how many credit search footprints you have, this can be easily done online, through companies such as Checkmyfile or Experian. Sometimes credit reference agencies provide a free trial or have a fee of £2 to receive a statutory report copy.