If you have suddenly been caught short of money and something unexpected has cropped up you might need to apply for a loan. Your chances of being accepted for a loan are good if your credit rating is good. However, if your rating is not so good you might struggle to find approval. This leads many people to wonder if there is such a thing as no credit check loans in the UK.
It would be nice if lenders didn’t put so much faith into your credit past. More so if you have turned your circumstances around and you are now in a better position than you were when you earned a bad credit score. However, in the UK all lenders will want to check your credit score as this is the only way they have of knowing how big a risk you are if you want to borrow.
No Such Thing as No Credit Check Loans
Therefore, to answer in all honesty there really is no such thing as loans that do not require a credit check.
All ethical lenders are going to want to peek into your credit rating but how deep they look will depend on how much you want to borrow, and when you can repay the loan.
Loans that require a deep in-depth look into your credit rating include the personal loan. Loans, where lenders will only glance at your credit past, include short-term loans and payday loans.
Why Lenders Look Deeper With Some Loans
Lenders will look deeper into your credit past with some loans more than others depending on the amount you want to borrow and when you can repay it.
For instance, with a personal loan you could ask to borrow thousands of pounds and spread out the loan over many years. Lenders are going to want to know how you managed credit in the past before they offer a large sum of money such as this. With this in mind, they will scrutinise your credit history.
On the other hand, if you want to borrow a smaller amount of money and you can pay it back within a month of two; most lenders are not too worried about your credit past. They will still look but the panel of lenders we work alongside will also focus on your current circumstances and verifiable income.
Who Compiles Credit Scores?
There is nothing simple about credit scores, credit ratings and credit files. In the UK, your credit score comes from the information on your credit file.
This information comes from three credit reference agencies in the UK. These are Experian, Equifax and Callcredit.
The three CRAs collect information about your past and you are given a credit score based on that information. When you apply for credit lenders will ask one of the agencies, perhaps more, for your credit file and this determines how big a risk you are for repaying the loan if they approve it.
As there are three different credit reference agencies, you will have different scores. The agencies differ in credit scores, so you will have a different score with each. For example:
- Experian score up to 999, with a credit rating of 999 being the best possible;
- Equifax score up to 700 so this would be a perfect credit score with them;
- Callcredit scores up to 710 with that being someone with a perfect credit rating.
What is more important to lenders that your actual credit score is the information on your credit file?
What Lenders Look For In Credit Checks
So, what do lenders check when they look into a credit rating?
- Whether you have CCJs;
- How much credit you have and the percentage used;
- If you are on the electoral roll;
- Whether you have joint credit;
- Any previous searches for credit you have made;
- Late or missed repayments;
- Previous addresses or names you have had.
It is worth you checking your own credit score to find out what information is on your credit report.
It has been known for mistakes to appear on credit files and these will go against you. For instance, you might have paid off a loan but it is showing as unpaid. Errors on your credit file can be cleared by contacting the lender in question.
Are You Eligible for A Loan?
Before applying for a loan in the UK, you do need to make sure that you meet the basic eligibility requirements. These do not have anything to do with whether you have a good or bad credit rating; they apply to anyone looking for a loan.
The basic criteria all lenders look for include:
- That you are at least 18 years of age;
- You have an address in the UK;
- You have a verifiable regular income;
- You have a bank account in your name;
- A debit card is attached to the account in your name;
- Direct debits can be set up on the bank account for the lender to collect the repayments.
Loan Options for People with Poor Credit History
Just because you have poor credit history and lenders check your credit score, it does not automatically mean you cannot get a loan.
Some loans come with more leniency than others do as we mentioned above. The smaller the loan and the quicker you can pay it back the more likely you are to find approval.
While there is never any guarantee that you will be accepted for a loan, the following loans may be more suitable for people whose credit rating is bad. Of course, these are not, no credit check loans. The lender will make a check, just that lenders may not focus too much on your credit past.
- Payday Loans
Payday loans are among the easiest types of loan to find approval for as the loan is taken out only for a very short period and the amount of money borrowed is relatively small. Lenders do not usually focus too much on your past credit history and the panel of lenders we work with will take verifiable income into consideration.
Lenders usually offer a sum of money in the region of £100 to £500 with payday loans. While this might not seem a small sum to you, it is to lenders in the grand scheme of things.
With payday loans, you borrow money over one to three months, or paydays assuming you are paid monthly. Interest is added onto the amount you borrow daily, so by repaying the loan as soon as possible you can keep the total cost of the loan down.
Loans of this nature are usually applied to meet a sudden and unexpected financial outlay that you know you can cover when payday comes around. However, you could apply for a loan to cover any financial shortfall.
- A Short-term Loan
A short-term loan is another type of loan offering what lenders class as a small sum of money. Lenders usually class anything up to £1,000 a small sum. However, this could differ from lender to lender with some offering more and some less.
What lenders class as a short term might differ. However, repayments can usually be spread out over a 12-month period. When considering a loan, repaying it back in the shortest time possible is the best way to cut down how much interest you pay. Of course, you also have to ensure that the monthly repayments are affordable at the same time.
Both the payday loan and short-term loans are loans that lenders will not pay too much attention to your credit history, as they are loan offering only small sums of money.
Other Choices of Loans to Consider
If you need to borrow a larger sum of money that what the payday or short-term loan offers you will have to consider other loan options.
Below are two more choices of loans. However, as they offer larger sums of money and can be spread over longer periods, the lender is likely to make a deeper check of your credit history. On saying this, we do work with a panel of UK lenders who will also consider verifiable income along with your past.
- Guarantor Loan
A guarantor loan is aimed more at people with a poor credit history than those with a good credit rating. This type of loan is often considered as a last resort to a loan when you cannot get acceptance for another type of loan.
With a guarantor loan, you have to find someone who knows you who is willing to stand as your guarantor. You cannot have a spouse or partner stand as a guarantor so it would have to be a friend or other relative.
On the good side, the chance of acceptance is higher with a guarantor loan. The downside is that not everyone has someone they can ask or wants to ask someone.
Another downside with a guarantor loan is that the APR on such loans is generally high.
- Secured Loan
Secured loans are another type of loan that you might stand a better chance of getting approval for if you want to borrow a larger sum of money.
This type of loan has to be given serious thought, as you do have to secure something of value against the loan. This is usually a vehicle or your home. In the event you cannot make the loan repayments, you stand to lose whatever you put up against the money you borrowed.
Obtaining an Online Loan with Poor Credit History
If you do have a poor credit history and need a loan, one of the best places to look for a loan is on the internet. There are many benefits to doing so and more so if you apply for your loan with our help.
Access to Numerous Lenders from One Application
One of the biggest benefits to looking for a loan with our help is that you can gain access to a wide panel of lenders and only have to make a single loan application. This may boost your chances of finding a loan and not have multiple applications noted on your credit file.
Quick Application No Paperwork
Applying online with our help is the fastest way to find a suitable loan. It takes just minutes to make an application. If we match you with a lender, money may be paid into your bank account on the same day.
Get a Loan Based on Verifiable Income
We do not offer loans ourselves, instead, we work alongside a large panel of UK lenders who take all circumstances into consideration. The lenders we work with will look into your credit history but at the same time, they also realise that you might now be in a better position to repay a loan. They will consider verifiable income along with your past.
Access to Loans with Competitive Rates
When you apply for a loan with our help, you get access to loans with some of the most competitive interest rates for people with poor credit ratings.
When it comes to interest rates you are never going to get the lowest rates, these are reserved for people with good credit ratings.
Access to Numerous Loan Options
When you compare loans with our help, you can get access to numerous loan options, which may increase your chances of getting approval for a loan. However, we cannot guarantee a loan.
When applying with our help you get an instant decision after providing us with just a few details about the loan you require and your circumstances.
While lenders do not offer no credit check loans in the UK, we do work alongside lenders willing to consider verifiable income not just credit history. Apply for your loan the easy way, without any paperwork.