How lenders and brokers check eligibility (soft vs hard)

Understanding the difference between a soft search and a hard search is the key to knowing if a loan enquiry will affect credit scores.

• Soft search (soft check / soft footprint) — used for pre‑qualification or affordability estimates. It does not show up as an application on most public credit reports and will not reduce your credit score. Soft checks are often visible only to the organisation doing the check and, in some cases, to you when you request your own report.
• Hard search (hard credit check) — used when a lender carries out a full credit assessment as part of a formal application. Hard searches are recorded on credit files and can cause a small, short‑term drop to a personal credit score. Multiple hard searches over time, especially from unrelated lenders, can be more damaging.

Typical use in the application process: most brokers and lenders perform a soft search first to shortlist likely options. A hard search is only performed when you accept a formal offer or expressly agree to a full application.

Business credit files vs director (personal) credit files

When applying for business finance for a limited company, lenders commonly check two separate records:

• Company credit file — commercial credit reference agencies (e.g., Creditsafe, Experian Business) hold records of company payment history, filings, public records and director appointments. This file reflects the financial history of the business itself.
• Director’s personal credit file — consumer credit reference agencies (Experian, Equifax, TransUnion) hold personal credit histories for directors. For small or newer building services firms, lenders frequently review directors’ credit to assess risk and may require personal guarantees.

For building services businesses (electrical contractors, plumbers, HVAC engineers, small commercial contractors), lenders weigh trading performance, contract pipeline and assets heavily. A strong business trading record can reduce the emphasis placed on a director’s score, although director checks are common for loans from around £10,000 upwards.

What typical building services lenders look at during eligibility checks

Lenders tailoring finance for building services firms assess commercial realities as well as credit history:

• Turnover and pipeline: seasonal work, contract backlog and recurring maintenance contracts improve affordability.
• Profitability & margins: trade margins and cost structure on projects.
• Outstanding invoices: invoice finance providers will check debtor quality and payment profiles.
• Assets & vehicles: asset finance and vehicle loans rely on valuations of tools, vans and plant.
• Trading history: length of trading and recent accounts.
• Security & guarantees: whether the lender will ask for personal guarantees, chattel mortgages or charges on property.

Different finance types have different check profiles:

• Invoice finance: usually quick soft prescreens, then fast decisions.
• Asset finance: prescreen + asset valuation; full application may involve a hard check.
• Unsecured cashflow loans: affordability checks then a hard search on application acceptance.

Will an eligibility check through UK Business Loans affect my credit score?

Short answer: usually not. UK Business Loans and our broker partners typically use soft searches when carrying out initial eligibility checks so your credit score will not be affected at that stage. A hard search is only requested if you decide to proceed with a formal application and give permission.

Typical process we follow:

1. You submit a short enquiry with details about your business and the funding needed.
2. We match you to lenders and brokers experienced in building services and ask them to carry out pre‑qualification checks — usually soft searches.
3. You receive offers or indicative terms. If you accept an offer, the lender will request a full application and may perform a hard search at that point.

When a hard search might happen earlier:

• If a lender’s automated system requires a hard search to return any decision.
• For higher‑risk or specialist lenders who always perform hard checks at pre‑qualification.
• Where manual underwriting involves checking detailed director credit automatically.

How to avoid unnecessary hard searches:

• Tell us or your broker you want only soft pre‑qualification checks up front.
• Ask any partner to confirm whether their initial check is soft or hard before they search.
• Use a broker (or our matchmaking service) to aggregate options so you don’t trigger multiple hard searches from different lenders yourself.

If you’d like a sector‑specific pre‑qualification that avoids hard searches unless you agree, start your Free Eligibility Check here: Free Eligibility Check.

Effects of multiple searches & “rate‑shopping” best practice

Multiple hard searches can increase the perceived risk on a credit file. However, most credit scoring systems treat several hard searches for the same type of credit made within a short window (typically 14–45 days) as a single enquiry for rate‑shopping purposes — reducing the impact of multiple checks.

Recommended approach:

• Consolidate your search: use UK Business Loans to compare options so you only undergo one hard search when ready.
• Time your applications: if you must approach several lenders directly, try to do them within a tight window.

Data privacy & how we use your enquiry

UK Business Loans is an introducer that connects building services businesses with lenders and brokers. The enquiry form collects information we pass to selected partners to match you to the most suitable finance options. The form is not a loan application — it’s an information step to help us make accurate matches.

We handle your details with care and only share them with partners who can assist your enquiry. For full details about how we store and use your information, see our Privacy Policy on the site. If you want to proceed only after knowing whether a partner will use a soft or hard check, tell us on the form and we’ll flag that for the broker/lender.

Practical checklist for building services business owners before a check

Have these ready to speed the process and improve pre‑qualification accuracy:

• 6–12 months business bank statements
• Recent invoices and details of the contract pipeline
• Latest company accounts (where available)
• ID for directors (passport/driving licence)
• Details of vehicles, plant or assets to finance
• Any records of CCJs or arrangements with HMRC (be prepared to explain)

Why use UK Business Loans for your eligibility check

We specialise in matching building services firms with lenders and brokers who understand trades, project cashflow and asset needs. Using our service lets you:

• Save time — one short form connects you to multiple partners.
• Protect your credit — most initial checks are soft and won’t affect scores.
• Get sector expertise — lenders familiar with electricians, plumbers, HVAC and small contractors.

Ready to find out what you might qualify for without affecting your credit? Get Quote Now — our enquiry form takes around 2 minutes and is free and non‑binding.

Related reading: if your business specialises in building services, see our industry page on building services business loans for further information.

Frequently Asked Questions

Will an eligibility check show on my personal credit file?

Only if a lender performs a hard search. Most initial eligibility checks via brokers are soft searches that do not appear as a formal application on your personal credit file.

What’s the difference between a soft and a hard credit search?

A soft search is a non‑impacting check for pre‑qualification. A hard search is recorded as a formal credit application and can slightly lower a personal credit score for a short time.

Do lenders always check the director’s personal credit?

Not always, but commonly for smaller or newer limited companies. Lenders assessing loans from £10,000 upwards often review director records, especially where personal guarantees are requested.

I have adverse credit — can I still get finance?

Possibly. Different lenders specialise in different risk levels. A soft pre‑qualification can find lenders willing to consider your position without affecting your credit score.

How quickly will I hear back after requesting an eligibility check?

Many partners respond within hours during business hours. After you submit the form, matched brokers/lenders will contact you to discuss next steps.

Is the enquiry form a loan application?

No. The enquiry form collects information so we can match you to suitable brokers and lenders. A separate full application and your explicit agreement are required before any hard credit check.

Next steps — start a Free Eligibility Check

Most initial checks won’t affect your credit score. If you’re a contractor, trades business or firm in building services seeking funding from around £10,000 and up, complete our short enquiry to see which lenders and brokers are likely to help. It takes two minutes and there’s no obligation.

Get Started — Free Eligibility Check