To apply for a loan in the UK, you ought to check your eligibility.
Your eligibility determines the loan amount that you can borrow, which is why using online eligibility calculators is an excellent way to check eligibility.
However, applying for credit checking affects your credit history and is likely to bring down the credit score. As your credit score declines, lenders are less likely to sanction the loan.
Soft search loans are helping customers recognize where they stand so as to change their expenditure patterns and maintain a healthy credit score.
What Is Soft Search?
A soft search is fundamentally a type of credit search to draw up an approximation of your credit score.
Unlike a hard search, a soft search for loans does not leave a negative mark on your credit score, and lenders cannot tell whether or not you have performed a soft search on your credit profile.
If you apply for a loan in the UK and have your application rejected due to a low credit score, your rejected application can affect your credit score.
This is where the use of a soft search for loans comes into play. A soft search allows you to keep track of your credit score and improve it by changing your spending habits.
How do you Maintain Your Profile and Credit Score
The ideal way to ensure you avail loans when required is monitoring your credit score. Having an excellent credit score is a sure-fire way of getting a loan approved in the UK. Here is what you should consider while maintaining a good credit score.
- Make Timely Payments
If you are in debt, your lender is highly likely to reject your loan application. Your payment history is one of the most significant indicators of your ability to repay your loans. If you use a soft search for loans and find that your credit score is low, recognize that your delayed payments be the primary cause of this.
Making timely payments for your borrowed loans is bound to improve your credit score.
- Consider your Credit Utilization
Using your available credit in excess is a massive financial risk. Making sure you do not overuse your credit and spend within your means can take you a long way in maintaining a good credit score. A mere soft search for loans is enough to let you know that you may be overusing your credit.
- Continuous Monitoring of Credit
You may have guessed by now that lenders cannot detect a soft search for loans. However, a soft search can also help you spot identity theft in the UK.
Monitoring your credit score helps you analyze when and where you need to make changes to maintain an excellent credit score.
- Employing a Score Boosting Program
After doing a soft search for their loans, most customers find that their credit score is less than satisfactory. Fortunately, you can make use of programs to help boost your credit score. You may link your online banking data and allow one of these score raising programs to generate a report for you.
These programs boost a weak credit profile by letting the program add your telecommunications and utility payment history onto your report.
- Timely Applications
With each application comes a hard search on your credit record, which may drastically reduce your credit score. Using a soft search for loans is the safest way to know if you are eligible for a loan or not instead of applying and subsequently getting rejected.
Be sure to keep track of your credit score and refrain from sending too many loan applications in a short time frame. Applying for numerous credit cards in quick succession can be detrimental to your credit score. A soft search for loans can help you do this.
The working of an Eligibility Calculator
Eligibility calculators allow you to perform soft searches for loans on your credit profile before applying for a loan. They allow you to perform these soft searches quickly. Several banks tend to use this facility instead of hard searches to avoid adversely affecting your credit score, and in turn, your eligibility for a loan.
Eligibility calculators generally require you to provide the following details
- Your current salary
- Your desired loan amount,
- Your name,
- Your date of birth,
- Your place of residence
- Whether or not you require a mortgage,
- Your credit card details
- The tenure over which you need the loan
Based on the information mentioned above, the eligibility calculator generates a rough estimate of your eligibility. The credit score it displays shows you your chances of getting a loan and the loans you are eligible for.
Eligibility tools are being used widely in the UK owing to their accuracy and attention to detail. Given that a whole multitude of factors is taken into account while calculating the credit score, there is a high chance of being extremely accurate.
This makes repeated trips to the bank redundant if you want to apply for a loan.
Ultimately, lenders value an excellent credit score. Making use of the soft search for loans facility to verify your eligibility is the ideal way of gauging where you stand, thereby figuring out your chances of getting a loan sanctioned and the loans for which you will be eligible.