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Martin Lewis has explained one of the rarely discussed aspects of bank accounts
Martin Lewis explains hard and soft bank account searches – what you need to know
- Money-saving expert Martin Lewis has warned UK bank account holders to be aware of the difference between hard and soft bank searches.
- The MoneySavingExpert founder addressed the issue on his latest podcast after hearing from Dan, a Sheffield listener who was unsure about switching banks with his mortgage deal expiring in six months. Dan had opened Chase and Barclays accounts to take advantage of a £200 switching bonus but was concerned about the impact on his credit score.
- Martin explained the difference between ‘hard’ and ‘soft’ credit searches. “Soft searches you can see but it doesn’t tend to affect your creditworthiness – can’t affect your creditworthiness,” he said.
- However, he noted that most banks conduct hard searches when opening accounts because they include overdraft facilities, which are credit products. Chase UK is an exception as it doesn’t offer overdrafts and only performs soft identity verification checks.
- Dan discovered both his Chase and Barclays searches appeared as soft searches on his Monzo app, leading him to ask: “Can I continue to switch willy-nilly without fear of it affecting my mortgage application?”
- Martin, a regular on BBC and ITV, advised caution, telling listeners: “What I would strongly in your mortgage position advise you to do is to consider that all bank account applications, unless you know they do a soft search, will do a hard search, and therefore could have an impact on your creditworthiness.”
- Hard searches remain on credit reports for up to two years and can affect approval chances for future credit applications.
- READ THE FULL STORY: Martin Lewis explains ‘searches’ rule for ‘most bank account applications’
