Half of consumers don’t check their eligibility before applying for a credit card, loan or mortgage

When applying for credit, 55 per cent of consumers have never checked their eligibility before applying directly with a lender, new research has revealed.

Of those 43 per cent thought checking their eligibility beforehand would negatively impact their credit score.

But while checking your eligibility won’t make an impact on your credit score, applying directly with a lender and being rejected will leave a hard mark on your credit score, which other lenders will see.

If you use a free eligibility checker, the provider running the check performs what’s known as a soft search and this doesn’t affect your credit score. Only you are told the result, so other lenders will not see it and it won’t have an effect on ability to borrow in the future. 

However, the research from Experian shows a big gap in understanding when it comes to these checkers.

Of those questioned, 45 per cent said they didn’t know that the majority of lenders are now signed up to eligibility services and 23 per cent didn’t know what the benefit of doing an initial check before applying was.

While 40 per cent said they didn’t know it was possible to check multiple times if they would be approved for credit without this affecting their credit history.

Other reasons given for not looking at their eligibility included not wanting to part with personal information and not knowing what the benefit of doing a check would be.

Those aged over 55 were least likely to have used a eligibility checker before applying 

When it comes to age, older consumers are less likely to have used a checker before applying for credit with 75 per cent of those aged 55 or older never having checked their eligibility before, compared to 25 per cent of those aged 25 to 34.

Of the consumers who do check before applying for credit, 47 per cent said they did so because they didn’t want to damage their credit score and 37 per cent said they checked to save time and didn’t want to apply for loans or credit cards they wouldn’t be accepted to.

James Jones, head of consumer affairs at Experian, comments: ‘Using an eligibility-checking service can make a real difference when it comes to getting the best deal and financial products.

‘It’s fantastic that many Brits are checking before applying for credit, and not putting their credit score at risk, but there’s still a majority who are missing out.

‘More than 1 in 5 customers checking had 100 per cent for eligibility, which means they don’t have to worry about which products they can get, and instead focus on finding the right credit card or loan for their needs.’