Time to read : 3 Minutes

You ask is our regular feature where we take common questions Australians are searching for and give a simple, clear answer.

Today's question is around credit checks. It seems a lot people are wondering what is the difference between a hard and soft check and how it affects your credit score, if at all. Here's one answer.

Here's what you need to know:

Going deeper:

• Lenders use your credit score to decide whether or not to give you money.

• Your credit score is calculated from what appears on your credit report. It takes into account the amount you have borrowed, the number of applications you have made and if you pay on time.

• Depending on the credit report agency, you will get a score between zero and 1000. The higher your score, the less risky you are considered.

• It is a good idea to keep track of your credit score, and check your report at least once a year – it can be the difference between you securing or failing to get a loan.

• If you find any errors you can contact credit repair for assistance.