Credit Checks & Your Fig Loan Application

When you apply for a loan, lenders need to understand your financial history to make responsible lending decisions. One of the ways they do this is through a credit check. Here's how credit checks work and how they relate to your Fig loan application.

What Is a Credit Check?

A credit check is an evaluation of your credit history to assess how likely you are to repay a loan or credit card. This includes reviewing:

• Your borrowing and repayment history
• Outstanding debts
• Public records (e.g. bankruptcies)
• Your current credit score

In Canada, credit checks are performed through one of the two major credit bureaus: Equifax or TransUnion. These agencies collect and maintain information about your credit activity.

There are two types of credit checks: a soft credit check and a hard credit check.

Soft Credit Check

A soft credit check (or "soft inquiry"):

• Does not impact your credit score
• Is not recorded on your credit report
• Is used for pre-approvals, background checks, or when you check your own credit

Soft checks are a helpful way to see potential loan offers without affecting your credit profile. We recommend checking your credit score at least once per year.

Hard Credit Check

A hard credit check (or "hard inquiry"):

• May affect your credit score
• Is recorded on your credit report
• Is used by lenders when you officially apply for a loan, credit card, mortgage, or any other type of debt or revolving credit account

Hard inquiries can lower your score slightly in the short term, and multiple hard credit checks over a short period may have a greater effect.

How Fig Uses Credit Checks

Fig uses both types of credit checks at different stages of the application process:

1. Soft Credit Check

• Conducted first, during your initial application
• Helps us evaluate your eligibility and prepare a personalized loan offer
• Has no impact on your credit score

2. Hard Credit Check

• A hard credit check is only performed if your application is approved.
• It is not conducted if your application is declined, even if you submitted the full application.
• You can proceed with your application and review your offer without any impact on your credit score.
• We will always request your consent before completing the hard credit check.
• Once your loan application is approved and the hard credit check is completed, it is reported to the credit bureau.

This means you can explore your options and submit your application with peace of mind, knowing that your credit score will remain unaffected unless you're approved and explicitly consent to proceed.

Learn More

To better understand credit reports and scores, visit the Government of Canada’s debt and borrowing help page.

Disclaimer: This article is intended to provide general information and does not constitute financial advice. While we aim for accuracy, we cannot guarantee that this information is complete, up-to-date, or applicable to every situation.