{"id":1787,"date":"2026-11-05T11:27:52","date_gmt":"2026-11-05T00:27:52","guid":{"rendered":"https:\/\/fundo.com.au\/blog\/?p=1787"},"modified":"2026-11-05T12:53:12","modified_gmt":"2026-11-05T01:53:12","slug":"does-applying-for-a-loan-affect-your-credit-score","status":"publish","type":"post","link":"https:\/\/fundo.com.au\/blog\/does-applying-for-a-loan-affect-your-credit-score\/","title":{"rendered":"Does Applying for a Loan Affect Your Credit Score?"},"content":{"rendered":"

Sam has put off the bathroom repair for months. Now the leak has reached the ceiling, and the quote is $6,000. Sam would like to see what a loan could look like, but a friend once warned that every application leaves a mark on your credit file. So Sam hesitates. Does applying for a loan really affect your credit score?<\/span><\/p>\n

Sam is an example, not a real customer.<\/span><\/i><\/p>\n

It can. When a lender checks your credit report because you’ve applied for credit, that check is recorded on your credit report as an enquiry, other lenders can see it, and several in a short time can count against you. Checking your own credit report is different and doesn’t affect your score. This guide explains the difference and what to do before you apply for any loan.<\/span><\/p>\n

What is a credit check?<\/b><\/h2>\n

A credit check (or a credit enquiry) is when an individual or organisation accesses your credit report. Your credit report is a record of your credit history, including all types of information about you and how you’ve managed credit in the past.<\/span><\/p>\n

There are <\/span>two types of credit checks<\/b>, and each works in a different way and has a different impact. The biggest difference is who can see the enquiry and how it impacts your credit score.<\/span><\/p>\n

Soft credit check<\/b><\/h3>\n

A ‘soft’ credit check lets you or an authorised third party appointed by you to obtain your credit information. For example, you can ask a credit reporting body for a copy of your own credit report, or authorise someone in writing to help you get it, such as a financial counsellor.<\/span><\/p>\n

Hard credit check<\/b><\/h3>\n

A ‘hard’ credit check is when a credit provider requests access to your credit report when you make an application for credit for a new loan or refinancing an existing loan. It helps the lender decide whether to offer you a loan. Hard credit checks get recorded on your credit report as a credit enquiry, will be shown to other lenders and may affect your credit score.<\/span><\/p>\n

What is a credit score?<\/b><\/h2>\n

Your credit score (or credit rating) is a number that represents your creditworthiness and risk profile as a borrower. It is a summary of the credit information on your credit report which credit providers might use to make decisions when you apply for credit.<\/span><\/p>\n

Each credit reporting body works out its own rating system or credit score on its own scale, so the rating or number can be different depending on the credit reporting body. Factors that contribute to changes in your score can include the number of credit enquiries or loan applications you’ve made and whether you pay loan repayments on time. Typically, a higher score generally means you’ve managed credit well and are a less risky customer. A lower score doesn’t mean you can’t borrow, but some lenders will look at it more closely.<\/span><\/p>\n

What affects your credit score?<\/b><\/h2>\n

Credit scores move over time, and a few things usually have the biggest effect:<\/span><\/p>\n