After a chat with customer service, about my credit file, as due to financial difficulty I am going to have defaults added to my report. They said that external credit history is only considered in relation to an overdraft, so my account will stay open as external credit history is irrelevant as to whether you can have a Monzo account or not, it only matters in relation to an overdraft.
Therefore, what is the difference between the ‘credit check’ done for a Monzo overdraft, in comparison to the ‘soft’ credit check done when you initially open an account? It’s all so confusing.
A soft credit check is an initial look at certain information on your credit report. Companies perform soft searches to decide how successful your application would be without conducting a full examination of your credit history.
Crucially, soft searches aren’t visible to companies – so they have no impact on your credit score or any future credit applications you might make. Only you can see them on your report and it doesn’t matter how many there are.
When you compare credit cards, loans and mortgages with Experian, a soft search will be done on your report. Remember, we’re a credit broker, not a lender†.
I would assume a soft credit check is you are who you say you are , living in the place that you say you live , which will let you open a current account, where you can pay money in to cover your outgoings , if you haven’t enough money in to cover money out your payments will bounce and not be honoured once you reach zero - or not enough to cover the outgoing bill. - therefore you’re not asking for credit.
A credit check I would assume is a check that asks have you repaid “credit” offered previously , if you have all well and good, you will be offered credit by the bank , if you have defaulted it would affect whether you are offered any credit as the bank could see you as a risk for repayments
I believe a soft credit check is something that isn’t shown on your credit report (the check the company has made) but will just see if address and details are accurate, I believe a soft credit check won’t affect your credit rating because it’s not classed as a “hard” search
You can have multiple ‘soft’ credit checks, this just checks your details as mentioned above. ‘Hard’ credit checks delve deeper into your financial history and if you have multiple hard credit checks in quick succession, it can (and probably will) affect your credit rating. Soft checks will not.
