Credit Checks & Your Fig Loan Application

Modified on Thu, 11 Apr 2024 at 04:15 PM

What is a credit check?

A credit check is an evaluation of an individual's creditworthiness, which is a measure of how likely they are to repay a loan or credit card. Typically a credit check involves reviewing an individual's credit history, including their borrowing and payment history, outstanding debts, and credit score.

Your credit score is reported by one of two main credit bureaus in Canada, Transunion and Equifax. These two companies are responsible for collecting and maintaining information about individuals' credit histories. A company will submit an inquiry to one of these two credit bureaus in an attempt to validate an applicant's provided information and eligibility for a credit product.

There are two types of credit checks that can be completed, a "soft check" or "hard check".

Soft Credit Check

A soft credit check, also known as a "soft inquiry," is a type of credit check that does not impact an individual's credit score, nor are they recorded on your credit report. Soft credit checks are often used for pre-approval of credit offers or for background checks by employers.

Some companies also offer a "free credit check" which can be completed by an individual to check their own credit. We recommend checking at least once per year, though this score updates generally once per month.

Hard Credit Check

A hard credit check, also known as a "hard inquiry," is a type of credit check that can impact an individual's credit score. Hard credit checks are typically used by lenders when evaluating an individual's creditworthiness for a loan or credit card application.

How Fig Uses credit checks

Fig uses both types of credit checks during the application process. We use a soft credit check first and foremost to prepare and pre-approve your personalized offer. This allows us to determine your eligibility for a loan and provide you with the best offer we can.

A hard check requires your express consent and is only done during the application process once you have provided us with further details to complete the approval process. 

You can find more information regarding credit reports and credit scores at the Government of Canada's debt and borrowing help page.

We do our best to provide useful information. However, we cannot guarantee that the information is complete, accurate, up-to-date or otherwise reliable for any particular purpose. This article is provided to you as information only and not as advice tailored to your reality.

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