Will I get credit or qualify for lease or finance deals? How does "soft search" actually work?
9th April 2019
Poor Credit and Bad Credit hints and tips
If you are concerned that you may get turned down for credit then this guide is for you.
We also go into detail on “soft search” and “hard search”, how they work and what to watch out for.
One of the most common questions we are asked is, “Will I get credit?. While no one can guarantee you getting credit to lease or finance a car or van there are a few steps you can take to make it more likely even if you have a less than perfect credit history.
Firstly, apply through a website like Leasetree. Yes, we know that that could sound “salesey” but it’s for the very good reason that Leasetree has access to 19 different lenders so you are more likely to find a finance company, or a number of finance companies – with a selection of APR’s – that will give you credit for a new lease car or a new lease van or, if you prefer, a used lease car or van. Alternatively you can always browse offers here that we have with realistic prices for those without a pristine credit history or with poor or bad credit.
Secondly, make sure that the service or lender you use has soft search (sometimes known as smart search) and uses this during the credit check in the first place to see if you will qualify for finance.
Soft Search and Hard Search
On that note, what exactly is “soft search” and how does it actually work is a question that we know some of our customers are interested in.
Soft search, sometimes know as Smart search, is a relatively new finance service which allows you to see if you will be approved for lease or finance without damaging your credit file in any way.
When you applied for Finance in previous times, you automatically got what is called a “footprint” or “hard search” on your credit file which allows other lenders to see that you have applied for finance. If you do a number of applications in a short time period, this can, in fact, have a negative effect on your credit score and drag your score down simply for applying for finance from multiple sources.
The good news is that in the last few years, Credit Bureaus such as Experian, Equifax, and TransUnion offer lenders a service whereby they can check a person’s credit rating without damaging their file meaning that you can shop around for the best rate without affecting your credit rating. Not all lenders subscribe to this service as it generally costs them more to provide a soft search service than if they just offer the traditional hard search option.
Why don’t all lenders offer soft or smart search? The most common way for soft search works is that when you work with a lender or lenders that offer the soft search facility (like Leasetree does) where an initial credit check creates a “soft token” which is not seen by other lenders. If your finance application is not approved, then you move on with your life – perhaps applying elsewhere – safe in the knowledge that it won’t affect your credit file.
If you are approved and then go on to enter into an agreement then this soft token turns into a “hard token”, but you will have already got the finance you wanted and the effect of one hard search is normally negligible.
This means that if you use Leasetree’s service we can access numerous soft credit checks to give you the best rate but not at the risk of harming your credit status – its one of the best features in our free find and finance service – secure the best car and van deals in one place without risk of harming your credit score even if you have a historically bad credit rating!
Equally, if you have a solid credit history this approach opens up prime rates for your new vehicle reducing your cost of borrowing and means you can get access to a wide range of lenders from one independent source.
Credit bureaus and credit reference agencies normally charge the lenders more for a soft credit search facility – hence the reason that some lenders still don’t use it so make sure you use a lender or panel of lenders that do use soft search.
Leasetree only uses lenders who, in the first instance, use soft search. Some Prime lenders and a small minority of near prime and sub-prime lenders, still only use traditional hard search when they check your credit report but Leasetree and its partners ensure that any initial search is only done with lenders who are prepared to pay more to guard your credit file.
County Court Judgements (CCJs) and their effect on getting car credit.
What if I have a County Court Judgement (CCJ) or have missed payments previously?
Having a CCJ or having missed key payments or having a bad credit rating does not necessarily mean that you will not get credit or qualify for van or car leasing and finance. Some lenders on our specialist lending panel have no problem granting credit in these circumstances, but you should be aware that you are likely to pay a higher APR than would otherwise be the case as your risk is likely to be seen as potentially higher.
Individual Voluntary Agreement (IVA)
What if I am in an individual voluntary agreement (IVA) where I am paying off my debts over an agreed period?
No problem. We have specialist lenders that have the foresight to approve those in an IVA as these lenders reason that you are committed to paying off historical debt though you will generally need to supply a letter from your Insolvency practitioner saying that entering into a new finance agreement will not put you at further risk.
Whatever your credit history, it only takes 1 minute to apply and we are very good at getting approval for those who have previously been declined as we have specialist bad and poor credit lenders on our huge panel of lenders. We only access lenders that use Soft Search in the first instance to see if you will be approved so you can have peace of mind and the service is completely free so why not fill out the short app today, there’s nothing to lose!
Applying is easy: