1 · More applications, more chances?
Say you need to borrow £5,000. You apply to a bank. It turns you down.
You try another. They say no too. You try a third. No again.
More applications, more chances, right? Not quite. Too many applications can make the next bank less likely to say yes.
Three banks said no. What do you think the fourth bank sees when it checks your credit report?
2 · Every application leaves a footprint
When you formally apply for a loan, the lender will usually check your credit report. That's called a hard search.
Every hard search leaves a footprint on your report, and other lenders can see it. Your three applications: three footprints.
You'd expect the report to say what happened next: three banks, three noes.
It doesn't. The rejections don't show: the fourth bank can't see that the other three said no. The record just shows that you applied.
3 · Five in a week
One application is normal. Lenders expect to see the odd search.
But say you've applied to five banks in one week.
When the sixth bank checks your report, it sees several recent applications. It might wonder why you're applying for so much credit, so fast.
That can make it less willing to lend to you, even if you can afford the repayments.
And it's not just loans. Applying for a credit card or a pay-monthly phone contract usually leaves a footprint too. So can an energy account.
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4 · How long a footprint lasts
A hard search usually stays on your report for one year at Experian and Equifax, and two years at TransUnion. A lender might check any of the three.
It doesn't carry the same weight the whole time. Experian says searches close together can affect your score for about six months.
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5 · Shop around with a soft search
You'll probably still want to try a few places. How do you shop around without each check counting as another application?
With a soft search. Lots of banks and comparison websites have an eligibility checker: it tells you how likely you are to be accepted.
It doesn't affect your credit score, and other lenders can't see it. Only you can.
You could check your eligibility with ten lenders without those checks hurting your chances.
Just make sure you're using the checker, not submitting a full application: checking is a soft search, applying is a hard one.
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Shop around: check, apply, and watch what lenders can see.
6 · Before you apply
An eligibility result isn't a guarantee. When you actually apply, the lender will normally do a hard search, and it can still say no.
You can also check your own credit report or score as often as you like: it's a soft search, and it doesn't affect your chances.
Before you apply, 1: check your own credit report. It's free at each agency, it's a soft search, and you can get mistakes fixed before a lender sees them.
2: use eligibility checkers to see which loans you're likely to get.
3: compare your options: the rate, what it costs each month, and how likely each lender is to say yes.
4: then decide which one to apply for, and apply to just that one.
Check as often as you like. Apply once.
Five applications in a week leave five footprints. Ten checks and one application leave one.