Personal loans · Guide
Soft credit checks and their role in getting a personal loan
When you look into a personal loan, your credit record gets checked — but not every check is the same. A soft check lets you glance at your record without touching your score; a hard check happens when a lender assesses you for a real application. Knowing the difference helps you shop around sensibly and apply once, with confidence.
Soft check vs hard check, in one minute
A soft check is when you view your own credit report, or when a non-application party — a pre-qualification tool, an employer, an insurer — looks at your record. A hard check, or hard enquiry, is when a lender assesses your credit report as part of an actual loan application. The key difference: a soft check does not lower your credit score, while a hard enquiry can cause a small, temporary dip.
One caution up front — “hard” and “soft” are industry terms, not phrases defined in the National Credit Act, though the practical distinction above holds across South Africa.
What a soft credit check does
A soft check gives someone a look at your credit information without counting as an application. It is recorded, but it does not reduce your score. These are the common situations where one happens.
Viewing your own credit report is a soft check. It never lowers your score, so you can check as often as you like — and you should before you apply.
A lender or comparison service may run a soft check to give you an early indication of what you could qualify for, before any formal application.
Some employers and insurers view your record for their own purposes. As it is not a credit application, it counts as a soft check.
A soft check is recorded, but it is not treated as an application and does not reduce your score. Only a hard enquiry can move it.
What a hard credit check does
A hard enquiry is created when a lender assesses your credit report because you have applied for credit. Unlike a soft check, it can nudge your score down.
- It happens when you apply. Submitting a personal-loan application lets the lender run a hard check as part of its affordability assessment.
- It can cause a small, temporary dip. One hard enquiry usually has a minor effect. The exact size depends on the bureau’s own scoring model, so there is no fixed number of points.
- Several in a short window add up. Repeated hard enquiries close together have a larger effect, as they can signal that you are seeking a lot of credit at once.
- It sits on your report for up to a year. Under Regulation 17 of the National Credit Act regulations, enquiries may be displayed and used for scoring for a maximum of one year from the date of the enquiry.
Note: some bureau marketing content still mentions a two-year period, but this reflects the older, superseded rules. Regulation 17 was amended in 2015 to set the maximum display period for credit enquiries at one year, which applies to every registered bureau.
Why a real loan always involves a hard check
A soft check or a pre-qualification step can give you an early steer, but it cannot be the basis for the final decision. Before a registered credit provider enters into a credit agreement, section 81 of the National Credit Act requires it to assess your affordability — your income, obligations and repayment history — and that means a full, hard credit check.
So if an advertiser promises a real loan with no credit check at all, treat it as a warning sign. A legitimate NCR-registered lender must check. The hard check is there to protect you from a loan you cannot comfortably repay, not just to protect the lender.
How to keep hard enquiries down
You cannot avoid a hard check on a genuine application, but you can keep the number low:
- Use your free report to prepare. Under the National Credit Act you get one free credit report per bureau per year. Checking it is a soft check, so it costs your score nothing.
- Compare before you apply. Do the groundwork with soft checks, then submit a formal application only where you genuinely fit.
- Don’t apply everywhere at once. Several hard enquiries in a short window have a bigger effect than one, so space out any applications — and if you are declined, work on the reason before trying again.
Knowing which check is which is one half of it; the other is the order those checks actually happen in once you submit an application.
The terms worth knowing
A look at your credit record that is not a credit application and does not lower your score — such as checking your own report.
The check a lender runs when you apply for credit. It can cause a small, temporary dip and sits on your report for up to a year.
The check the NCA (section 81) requires before a lender may grant credit, weighing your income, obligations and repayment history.
An organisation that holds your credit record. The main consumer bureaus in SA are TransUnion, Experian, XDS and Compuscan.
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