Created by: Rebecca Goodman | 14 October 2019

Why you need to use an eligibility calculator before taking out credit

Historically every time you apply for credit, be it a credit card or personal loan, the lender will check your credit history before making a decision over whether to lend the money to you or not.

This would make a permanent mark on your credit score which other lenders would see and if you were to make several applications in a short space of time this would impact your score negatively. Now, there are a number of eligibility calculators that will do this stage for you and most importantly won’t leave a mark in your credit history. Here we explain how they work.

Eligibility calculators use soft searches

Hard searches leave a mark on your credit score which can last up to six years, while soft searches can only be seen by you. This means if a soft search is done, no other lender will see it.

Eligibility calculators use soft searches to look at your finances and calculate your chances of being accepted for new credit. By using one you can find out if you’re likely to be accepted or not, without having a ‘hard’ mark left on your credit history.

A number of companies use soft searches, including insurance firms when you search for a new insurance quote via a comparison website. They will do this to verify your identity, but again it won’t leave a hard mark on your credit history.

You will usually see the mark on your credit score when you check it but it’ll be called something along the lines of ‘ID check’ and will only last a few months.

What details do you need to supply?

In order for an eligibility calculator to work, it’ll need certain details from you. This includes things such as your name, address, date of birth and postcode to prove your identity, along with your profession, income and any dependents you have.

From this data  it will be able to give you a rough score which will show you what kinds of credit you might be able to apply and be accepted for.

The details you give will not be shared to any other third parties and should only be used for the purpose of the calculator and giving you the score for being accepted for credit.

Where do these calculators get their data from?

There are a number of eligibility calculators around which are free to use. They will usually work with a credit reference agency and search most of the major banks and financial institutions.

When picking one to use, make sure it’s from a credible company and that it’s searching as many of the banks as possible to give you a more well-rounded result.

What if my score is very low?

If your results come back and you find that it’s unlikely you’ll be accepted, there are other options. There are many ways you can improve your credit score, being on the electoral register, for example, or checking your credit score to make sure there’s no fraudulent applications or payments on there.

You could also try a different kind of product, such as a credit builder credit card, which can help you to improve your credit score over time.  

If you’re really struggling with debts, there are lots of free and independent organisations and charities you can speak to including Step Change and National Debtline.

Are there any alternatives?

Yes. FriendlyScore is a modern credit score which enables you to check your score without leaving a footprint on your credit bureau account. By sharing your own financial data, FriendlyScore is able to calculate a credit score which can then be used by lenders to get you the best price on credit products. By not relying on credit bureaus, this puts you in control and won’t affect your chances of getting credit in the future. FriendlyScore also suggest ways of improving your score to enable you to get even better deals in the future. Best of all, it’s free.

To check your FriendlyScore today, simply download the app from either the Google Play Store or Apple App Store.

Money Eligibility calculator