When is a search conducted?

Every single time you make an application for credit, whether it's a loan, credit card, store card, overdraft, or mortgage, your prospective lender will search your credit record.

Even when you apply for car or home insurance, a search will usually be carried out on your file.

Each of these searches leaves a mark which can be seen by any other lender who then searches your file.

Lenders search your record to to look at how you have handled credit in the past and decide whether or not they will want to lend to you.

Why are multiple applications a problem?

What can you do?

Always check the application criteria for a financial product before you apply.

This way you have a good idea of whether or not the lender will accept you on terms such as salary, credit rating, and age before you allow them to search your file.

Never make lots of credit applications simultaneously just to see who will accept you, as this can only ever be damaging.

Many lenders will view multiple credit applications within a short period of time as a bad thing.

Applying for several lines of credit within a short period of time creates the impression that you are in desperate need of funds. Lenders will think you are less likely to be able to pay any further borrowing back on time.

They will see you as a risk and may decide not to lend to you on the basis, especially if your previous credit applications were declined.

However, some lenders might approve your application, believing they are more likely to make money from you as you are more likely to default on repayments.

How many is too many?

How long should you wait?

Try to leave at least a few months between applications. At least avoid applying for more than one line of credit at a time. So, if you intend to apply for a mortgage soon, do not apply for a credit card at the same time.

There is no hard and fast rule that determines the number of credit applications that will push you from looking like a responsible borrower to an unreliable one, because every lender will have different criteria to satisfy.

However, a few spaced out applications noted on your record is better than none. If a lender sees that you have handled credit in the past and been able to pay it back on time, they will be more likely to lend to you.

If you have never applied for credit before, a lender will have no information to go on, so will be less likely to lend to you than if you had a "healthy" amount of credit history on your record.

When is the best time to apply for credit?

It is best to only apply for credit when you are in a financially stable position, such as being in stable employment and living at a fixed address listed on the electoral roll.

As well as appearing less risky to the lender, it is also sensible to only apply for credit when you are in a position to be able to comfortably pay it back.

How long does information stay on your credit report?

Information on your credit report like late repayments or County Court Judgements (CCJs) will only stay on your credit record for up to 6 years before being wiped.

A lender is more likely to be more interested in how you have handled credit in the last 1 or 2 years.

This means that if you have a history of multiple searches in the past year, you will not have to wait 6 years before applying for credit again. Credit searches usually only stay on your record for a year.

In contrast, positive information on your credit record such as making repayments on time will stay on your file permanently.