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Yorkshire BS promises soft credit check for mortgage agreement in principle

  • 05/12/2017
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Yorkshire BS promises soft credit check for mortgage agreement in principle
Yorkshire Building Society (YBS) is to bring in soft credit checks on mortgage agreements in principle, following similar moves by rival lenders, which are designed to make it easier for borrowers to shop around for home loans.

The lender currently carries out a full a credit check during the early stages of a mortgage application, which is registered on a person’s file and can affect their ability to access credit in the future.

However, YBS and its intermediary arm Accord have promised to shortly switch to an enquiry search for a decision in principle – this is only held on file for 60 days and isn’t visible to other financial institutions.

A spokesperson from Yorkshire Building Society said: “We currently run hard checks on credit scores for application in principles.

“We regularly review the service we provide customers and intend to change this to a soft check in the future.”

Nationwide, Virgin Money and Leeds Building Society also run hard checks for an agreement in principle.


Lenders turning to soft credit checks

Santander announced the introduction of a soft credit check on mortgage decisions in principle for customers across its intermediary business yesterday.

The bank said the change would make it easier for home owners to compare mortgage options.

HSBC, Tesco, Lloyds and Halifax are among the lenders that already run soft credit checks solely for an agreement in principle.

Andrew Montlake, director at broker Coreco, welcomed the move and said clients had become increasingly concerned about how an agreement in principle (AIP) impacts their credit file.

He told Mortgage Solutions: “Clients [ask] more and more about how getting an agreement in principle will affect their credit rating.

“A soft footprint seems more than adequate at AIP stage and, while not a key part of the advice process, it is something that is borne in mind by client and broker alike when initially sourcing a mortgage.”

Once a full mortgage application is submitted, a so-called hard credit check is carried out by lenders, which can then be seen by other financial organisations.

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