Quick answer
A hard credit check happens when a lender accesses your full credit report because you've applied for credit. It's recorded on your report, other lenders can see it, and it may affect your score. A soft check, such as viewing your own report or a check for a rate offer, isn't shown to credit providers and doesn't affect your score. The simplest option of all is an enquiry with no check.
Key points
- Hard checks follow a credit application and are visible to other lenders.
- Soft checks, including checking your own report, aren't shown to credit providers.
- Both kinds can sit on your own copy of the report for five years.
- Ask any lender which kind of check it plans to run, and when.
- Hard check visible to lenders
- Yes
- Soft check visible to lenders
- No
- Checking your own report
- Soft — no score effect
“We’ll just do a quick soft check” sounds harmless, and often it is. But the words soft and hard get thrown around loosely, and business owners are left guessing which kind is about to happen to their file. Here’s how the two actually differ in Australia, and what to ask before anyone runs either.
What is a hard credit check?
A hard check (or hard enquiry) happens when a credit provider accesses your full credit report because you’ve applied for credit. It lets the lender see your accounts, your repayment history, any defaults and any other enquiries.
Equifax, one of the two main credit reporting bodies here, explains that hard enquiries are recorded on your report, are visible to credit providers when they check you later, and may affect your credit score.
So a hard check is the one that leaves a trail other lenders read.
What is a soft credit check?
Equifax describes a soft check as one triggered when you access your own report, or when a credit provider or authorised third party gets your credit information for rate offer purposes (quoting, rather than a formal application). Soft checks:
- are not shown on credit reports provided to credit providers,
- don’t affect your credit score.
You may still see them listed on your own copy of the report, and Equifax notes that both soft and hard checks can remain on the report for five years. The key point is that other lenders don’t see the soft ones.
How do they compare side by side?
| Hard check | Soft check | No check (enquiry only) | |
|---|---|---|---|
| Triggered by | A credit application | Checking your own file, or a quote-stage check | Just a conversation |
| Visible to other lenders | Yes | No | Nothing recorded |
| Can affect your score | It may | No | No |
| Stays on your own report | Up to 5 years | Up to 5 years | Not on the report |
| Good for | A final assessment | Knowing your own position | Finding out what’s realistic |
That last column is how our first step works. There’s no hard check and no soft check when you enquire. We listen, ask sensible questions and explain your options. If you then want to proceed, the lender assessing the loan will run the check it needs.
Which check will a business lender run, and when?
It varies a lot between lenders, which is why it’s worth asking out loud. Three questions cover it:
- “Will anything be recorded on my credit file at this stage?”
- “If you run a check, is it a quote-stage check or a full application enquiry?”
- “Whose files will you check — mine, my co-director’s, the company’s?”
A straightforward lender will answer those without fuss. If the answers are vague, or the check has already happened by the time you ask, you’ve learned something useful about how that business operates.
If you’re comparing options right now, you can also ask us the same questions. We’ll answer them plainly before anything touches your file.
Why do business owners end up with hard checks they didn’t expect?
Usually through one of these routes:
- Comparison and “matching” sites that pass your details to several lenders, each of which runs its own assessment. We explain this pattern in lead farms and comparison sites.
- Online applications where the fine print consents to a credit check the moment you press submit.
- Re-applying after a decline at a similar lender, which adds another enquiry without changing the outcome.
None of these are disasters on their own. Several together, in a few weeks, are what make the next lender pause. More on that in too many credit enquiries.
Should I check my own file before I talk to a lender?
It’s a good habit, and it’s free. Moneysmart confirms you’re entitled to a free copy of your credit report every three months. Because it’s a soft check, it doesn’t count against you. Looking first means:
- no surprises when a lender mentions an old default,
- a chance to fix mistakes before they cost you (our guide on fixing credit report errors walks through it),
- a clearer story to tell when you enquire.
Our step-by-step on checking your credit report shows where to go and what to look for.
Illustrative example: two “quick checks”
Illustrative only.
A physio clinic owner asks two lenders for a quote on a fit-out loan. Lender A says it will do a quote-stage soft check; nothing shows to other lenders. Lender B asks her to “just fill in this application to see a figure”, and the fine print authorises a full credit check. Two weeks later, a third lender sees Lender B’s enquiry but not Lender A’s.
Same owner, same week, very different footprints, simply because of which kind of check each lender ran.
Start with no check at all
The gentlest option is the one that doesn’t touch your credit file. With Hassle Free Loans, the first step is a 60-second enquiry with no credit check of any kind. Your details stay with our own lending team instead of being handed to a pile of lenders, and a real person calls to explain what’s realistic in plain English.
Give us accurate answers, including anything that might show up on a credit report later. It means the option we talk about will still stand up once a check is eventually run.
Frequently asked questions
Does checking my own credit report count as a hard check?
No. Equifax describes accessing your own report as a soft check that won't affect your score and won't be shown to credit providers. You're entitled to a free copy every three months.
Can a business lender do a soft check instead of a hard one?
Some lenders and brokers use lighter checks at the quoting stage, but practices vary. The only way to know is to ask directly what kind of check will be run and at what point in the process.
Will a hard check always lower my score?
Not always, and not by a published fixed amount. Equifax says a hard enquiry may affect your score. The effect depends on the rest of your file, and a single enquiry is usually far less significant than a cluster of them.
Do soft checks disappear straight away?
They can remain visible on your own copy of the report for five years, according to Equifax, but they aren't shown to lenders who check your file. That's why they don't count against you.
Does enquiring with Hassle Free Loans involve either kind of check?
Neither. Your first conversation with us uses only what you tell us in the enquiry. A credit check comes up only if you decide to go ahead with a specific option.