Do you know the Reality of the Hard Credit Check?

Mar 07, 2016

What is a hard credit check?

The hard credit check is logged on your credit report when you apply for credit at a credit provider.

A quick recap on credit records

Before your application for a loan is approved the credit provider will first research your credit score. This procedure is required by the National Credit Act and regulated by the National Credit Regulator. A good credit score will have a better chance of receiving credit. A bad credit score will have less success when applying.

Don’t be dismayed if you have a poor credit record. There are ways to improve your score over time. But you have to be aware of the effect of hard credit checks on your credit report.

Hard credit checks get logged on your credit report when you apply for something like an online loan. This means that a credit provider had to go to the credit bureaus of South Africa and research your name.

What does this mean to my credit report?

Be careful with how often you apply for credit. The credit bureaus will see this compulsory researching of your name as a sign of your consent to the process. The more you apply for credit the more hard credit checks get logged on your credit report. The bad news is hard credit checks decreases your credit score.

But why does it decrease my credit score?

Remember – people that apply too frequently for credit could have one of the two following characteristics. It either means that they burn so fast through money that their income can’t finance their spending habits. Or it means that they keep applying for credit because their applications never get approved. Not one of these aforementioned examples is good signs for a credit provider. This indicates poor credit management and shows signs of a future liability to a credit provider.

The good news is you are entitled to one free hard credit check per year. You can do this in your personal capacity at a credit bureau. This yearly free credit check will also not be logged on your credit report. Don’t waste your credit report by applying for the wrong loan. Let Fincheck assist you in finding quality credit providers with stellar loan offers. Go have a look at the Fincheck loan comparison page.

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