This blog post will outline Wagonex's credit check policy, with a brief explanation of why we use a hard credit check and the differences between a soft and hard credit check.
What is a hard credit check?
Here’s Bank Rate’s definition of a hard credit check:
‘A hard credit inquiry is when a lender or potential landlord pulls your credit reports and checks your credit score with your permission. Hard credit pulls take place when you apply for a credit card, personal loan, vehicle loan or lease or a mortgage.’
Our suppliers will look at your credit report, see when you’ve applied for credit in the past, and decide if you’re suitable for the price range of the vehicle.
We know your credit score can be misleading, and it’s not the most accurate way to assess your financial situation, because it's assessing your ability to afford an item based on your previous history of credit, not your overall finances, but it is important to note that failed hard credit checks can negatively impact your credit score, especially if you apply for credit too much in a short time frame, please watch out for this, as it can affect your credit rating for up to 6 months.
What’s a soft credit check?
A soft credit check is a look at the information on your credit report, but without the potential to ‘fail’ a credit check, usually a soft credit check is used to inform businesses on the viability of a successful hard credit check.
You can find out who has carried out a soft credit check on you in your credit report.
Examples of a soft credit check include:
- Checking your own personal credit score.
- An prospective employer can check your credit to assess your financial situation
Why does Wagonex require a hard credit check?
With a Car Subscription, you’ll usually pay a small refundable deposit, and a fixed monthly fee to get a car from 1 to 36 months.
With such a small refundable deposit compared to your alternatives, like a lease or PCP, a hard credit check gives our partners the chance to assess your credit history and score to decide whether you can pay the subscription fee every month.
We want to make subscribing to a car as easy as possible, but we also want our partners who provide the car to be able to know you're in the financial situation to pay for the car during the entire subscription.
At the end of the day, this ensures that you can afford the car and the supplier of the vehicle isn’t putting his asset at risk by delivering cars to potential customers that can’t pay it off.
It’s a reality that depreciation starts as soon as you start driving the car, so when some customers are unable to pay, the supplier has to take the loss.
What do you need before you a hard credit check?
- Email Address
- Proof of Driving License
If you have any more questions about our credit check you can start a conversation with a member of our customer service team in the bottom right from our live chat.