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Soft versus hard searches
A soft credit search is an indicative check that does not leave a mark visible to other lenders. Many lenders use soft searches at the enquiry or quotation stage, allowing you to explore options without affecting your credit profile. Always confirm whether a check is soft or hard before consenting.
A hard search is recorded on the credit file and is visible to any lender who subsequently checks. Multiple hard searches in a short period can lower a credit score and may signal to lenders that a business has been seeking credit unsuccessfully.
Company credit versus director personal credit
A limited company has its own credit file, held by commercial credit reference agencies such as Experian Commercial, Equifax and Creditsafe. This is separate from any director's personal credit file. A search on the company does not automatically appear on a director's personal file.
However, where a personal guarantee is requested — common on SME loans — lenders will typically run a hard search on the guarantor's personal credit file as well. See what a personal guarantee involves for fuller context.
Impact of multiple applications
Applying to several lenders simultaneously generates multiple hard searches within a compressed period. Credit scoring models recognise that consumers rate-shop for mortgages and treat clusters as one event; commercial credit scoring is less standardised and the same allowance may not apply. Spacing applications, or using a broker who can approach multiple lenders on one enquiry, reduces the footprint.
How long searches remain on the file
Hard searches typically remain visible on both company and personal credit files for twelve months, though their negative impact on scoring diminishes over time. Maintaining a track record of on-time repayments on existing borrowings does more to improve credit standing than avoiding all searches.
Frequently asked questions
Will a declined application show on my credit file?
The search itself will show, but the outcome — approved or declined — is not directly recorded on most credit files. Other lenders will see the search volume and timing but not the decision made.
Can I see what lenders will see before I apply?
Yes. You are entitled to request a copy of your company's commercial credit report from the main bureaux. For personal files, you can access your statutory report from Experian, Equifax and TransUnion free of charge.
Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.