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Zopa and credit scores

We want to explain exactly how Zopa uses your credit history and other information to make lending decisions.

Step one – the soft credit search

When you ask for a quote from Zopa, we initially perform a soft credit search.

This involves asking our two credit reference agencies, Equifax and Callcredit, for information about your previous credit history. As it’s a soft search, only you can see this on your credit file – it doesn’t leave a mark that other lenders can see.

Credit scores and offering you a quote

An important thing to note is there is no such thing as ‘your’ credit score. Equifax, Experian and Callcredit all store information on consumers, and use this to generate many different scores for banks, retailers and other institutions. Read more about what your credit score is here.

We are more interested in your credit history than the credit score the bureaus give us – things like your active credit, settled accounts, and payment history.

We use this, along with the models we’ve built from our eleven years of lending, to build an accurate profile of you so at this stage we can give you a personalised quote.

Step two – applying for a loan

If you like the look of your quote, proceed to a formal application and are approved, then we convert this soft search into a full (or hard) credit search. This is the bit that will leave a footprint on your credit file that other lenders can see.

Some other questions you may have

What are the advantages of a soft search?

Your cost of borrowing will be based on your individual circumstances and so you may not get the headline APR your loan-provider is advertising. By doing a soft search and taking into account your personal circumstances, we can show you the actual APR you would receive if you took a Zopa loan.Read more about exactly what an APR is.

This is a better way of shopping round for a loan than doing lots of credit searches that mark your credit file. Although multiple searches are unlikely to stop you from borrowing, they may drive up the APR you’d be offered from some lenders.

Why use two credit reference agencies?

To those of us in the trade, this is called a ‘dual bureau’ approach. We do this to make sure there isn’t anything missing on your credit file. Some banks don’t report account information to all the credit reference agencies. You can see a table showing which banks share data with which agencies on MoneySavingExpert.

What do I do if something is wrong with my credit file?

If you think that there’s something wrong on your credit report that’s impacting your ability to obtain a quote, you can contact the credit bureaus: Experian, Equifax and Callcredit to see your report and ask them to put it right.

You can then send an email to contactus@zopa.com so that we can set a flag in the database to re-score you. This means the next time you sign into Zopa for a new loan quote, we know to use the most up-to-date information.

There’s lots more information in our FAQs.