Big Issue Invest

Do consumers know the difference between soft and hard credit searches?

Fair For You introduces soft credit searches as an alternative way to buy the essential items without having to turn to high cost credit.

What happens in most houses when the fridge starts to make a funny noise? In many lower income households it’s a cause for huge anxiety, especially whilst having low credit rating. In 2018 the Office for National Statistics reported 10.3m of the UK population is suffering from high anxiety about their finances and this equates to a fifth of the UK population.

A poor credit file often exacerbated by use of extractive high cost credit providers leaves the most vulnerable with no option but to return to providers who maximise their income from customers that fall behind. It’s a trap that Fair for You as a lender is reminded of daily. Fair for You provides an alternative way to buy the essential items without having to turn to high cost credit.

Research shows how much stress is attached to such important purchases. So Fair for You have introduced an eligibility check, that doesn’t leave a footprint on the customer’s credit file, and allows them to check if they would be likely to get credit for an essential item.

When it comes to credit checks they are two options available to lenders, a soft and hard option. A soft search option allows lenders and consumers to run an eligibility check without affecting a consumer’s credit rating, whereas a hard search like the name suggests provides lenders an in-depth look into a customer’s credit history and this is tracked onto a consumers credit file.

CEO Angela Clements comments:

“It isn’t a guarantee of a loan, just a good indicator that Fair for You hopes we can help. Our customers can choose the repayments they want to pay to suit their budget, weekly, fortnightly, monthly or even four weekly. It’s a safe way of being able to check us out securely, and then to tuck us away for when they might need us. Where we can’t help, we will continue to route towards the grant search option at Turn2Us; a national charity that is fighting UK poverty.

“I am so pleased we have Soft Search live and working well through our eligibility page. Our team are committed to improving our services incrementally and this is another step in reducing anxiety for people that are lying awake at night worrying about a leaky washing machine that is on its last legs.

“Knowing you can apply when you are ready, without leaving a trace on your credit file allows people to build their resilience to financial shocks. It’s a type of insurance in households that are made vulnerable by their past credit experiences.

“I hear regularly of people who didn’t think they would get credit from us, and many people will not try us out thinking they would not be eligible. All we are looking to see is that they are managing their credit ok, and that they can afford to take out the new credit.”

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