Why is there a Soft Search from my Insurance Company?

Money_and_Travel

My Clearscore credit record shows a soft search from my car insurance company, but I pay my premium in one payment, when I renew.

Why are they doing a search, when I'm not taking out credit, or paying by installments?

powerful_Rogue

https://www.comparethemarket.com/car-insurance/content/do-car-insurance-providers-do-credit-checks/

Brie

powerful_Rogue said:

https://www.comparethemarket.com/car-insurance/content/do-car-insurance-providers-do-credit-checks/

Wow - it never occurred to me!  I wonder what specifically they are checking.  I assume a credit report will only show my name and vaguely recent address, but not my employment or anything else.   

I did know about the monthly payments meant you were signing up for credit and therefore a hard check would be done for that.  

Do car insurance companies check your credit score?

Car insurance providers will carry out a soft credit search when you compare providers to make sure that the details you’ve given them are correct. Only you can see this on you credit history and it won’t affect your credit score.

But if you choose to pay for your insurance monthly, rather than annually, your insurance provider will also do a full credit check. That’s because you’re setting up a credit agreement with your car insurance provider, so it’ll want to make sure you’ll be responsible when paying back the money.

DullGreyGuy

Money_and_Travel said:

My Clearscore credit record shows a soft search from my car insurance company, but I pay my premium in one payment, when I renew.

Why are they doing a search, when I'm not taking out credit, or paying by installments?

Some insurers have been known to use your credit score as a rating factor on the basis that if you are in financial distress you may be more tempted to liquidate assets via an insurance claim than trying to sell them.  That said one insurer would also increase premiums slightly for those they see as cash rich, time poor as people that are generally less price sensitive and less likely to claim for little things. 

In addition some will just want to check you are a real person by virtue of you being registered at the given address etc. Likewise some will check to see if they are prepared to even contemplate offering monthly instalments (aka a loan) before actually asking if you want a loan or to pay it off in one. They may then do a hard search if you say you do want the loan. 

Money_and_Travel

"Car insurance providers will carry out a soft credit search when you compare providers to make sure that the details you’ve given them are correct."

I haven't compared providers for several years now.

RG2015

Money_and_Travel said:

"Car insurance providers will carry out a soft credit search when you compare providers to make sure that the details you’ve given them are correct."

I haven't compared providers for several years now.

I am sure a car insurance provider would carry out a soft credit search whether you applied directly or via a comparison site.

The process of checking details is not in any way linked to the comparison process.

CliveOfIndia

Soft searches are often performed purely as an identity check - to confirm that your details are still the same as they were last year, for instance, before an insurer offers you a renewal quote (even if you pay for your insurance annually).

It's nothing to worry about - and do remember that a soft search can only be seen by you, it's not visible to any other lender who looks at your file.