Will applying for a business loan affect my credit score?
Enquiring with us involves no credit check at all — not a soft search, none. Nothing is recorded anywhere. Applying to a lender is usually a soft search on the business and its directors, which only you can see. The full search other lenders can see comes if you accept the offer, and we tell you before that happens.
Soft searches and full searches
A soft or quotation search leaves a record only you can see. A full search is visible to other lenders for about a year, and several of them close together reads as distress even if each application was sensible. Which you get, and when, depends on the lender and the product: some run a soft search to produce your offer and the full one only once you accept, and some run no search at all until you accept.
That is the real reason to stop applying everywhere at once. It is not that one search hurts; it is that five do.
What we check instead
We run your details against the published criteria of each lender on the panel. That tells us who could realistically say yes before anyone touches your file, which is the entire point of going through a broker rather than applying directly to four lenders.
The company’s file and yours
A limited company has its own credit file, separate from its directors’. When a lender searches the company, the search is recorded there. When it searches a director, usually because a guarantee is involved, the search lands on that director’s personal file. One application can leave a mark in two places.
Sole traders and partners have no such separation. For them the business and the person are the same, and every search lands on the personal file.
Look at your own file first
You can see your personal credit file free from the main agencies, and doing so has no effect on it. The company’s file is available from the business credit agencies, sometimes for a fee. Looking before you apply is the cheapest way to find an error, and the only way to find it before a lender does.
If something is wrong, each agency has a process for disputing it, and on a personal file you can add a short note explaining an entry that is accurate but misleading.
Common questions
Does checking my own credit file lower my score?
No. Looking at your own file is either not recorded at all or recorded as a search only you can see. You can check as often as you like, and before any application it is a sensible thing to do.
Will the lender search me personally as well as the company?
On most small business lending, yes, at some stage. Where a director gives a guarantee, the lender needs to know the guarantee is worth something, and that means reading the director’s own file. Ask at the start whether the search on you will be soft or full, and when it will happen.
Do eligibility checkers on lender websites leave a mark?
A genuine eligibility checker uses a soft search, which other lenders cannot see. The trouble is that the word is used loosely. Read what you are agreeing to before you submit and look for the words soft search. If they are not there, treat it as a full application.
Can I find out what a lender saw on my file?
Ask the lender which agency it used, then get your file from that agency. You will not see the lender’s own scoring, which belongs to the lender, but you will see the data it worked from, and that is where errors live.
Get a straight answer on your own numbers
About a minute, no credit check, and nothing is submitted without you.
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