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Can You Get a Loan Without a Credit Check?

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If you are wanting to find a loan with no credit checks, unfortunately there are not that many available. However, you can get a loan with bad or fair credit. Some people are worried that they can’t get a loan without a good credit score, which lenders find out through a credit check. There are a range of lenders that do offer loans to people with bad credit, it’s just about knowing where to look!

With most lenders, a credit check will be conducted before deciding whether to approve or deny a loan application. For those who are offered loans without a credit check, the lender might not be reputable or regulated, which borrowers should avoid at all costs. It’s important to check that your lender is valid and regulated by appropriate bodies, e.g. the Financial Conduct Authority (FCA).

 

What Does a Credit Check Involve?

 

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When you apply for a loan, the lender will carry out a credit check to view your credit history. With this check, lenders will look into your credit report, which provides them with the following information:

 

  • Any debts you have repaid
  • Any outstanding debt
  • Missed payments
  • Defaults on loans

 

Credit reports will also show your credit score, which is decided by the UK’s three Credit Referencing Agencies (CRAs); Equifax, Experian and TransUnion. Your credit score is compiled from your history with financial borrowing and management, and can be a deciding factor when lenders are assessing an application.

The majority of lenders will run a credit check before approving or denying a loan application. However, the type of credit check ran can vary depending upon the loan type. For example, some secured loan lenders will only run a soft credit search.

A soft credit search will only be used to confirm basic details and other pieces of relevant information, and will not have an impact on your credit rating such as a hard search can do.

 

How Does My Credit Score Affect My Chances of Approval?

 

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With some lenders, your credit score will affect your chances of approval. However, Forces Compare work with a variety of different lenders who consider those with bad credit scores. It’s important to know your credit rating, and search only for financial products with lenders who can accommodate for this. Our trusted partners can offer the following loans for those with bad credit:

 

  • Secured loans
  • Unsecured loans
  • Guarantor loans

 

Guarantor loans are often used by those with bad credit scores. With guarantor loans, the borrower will have to have a guarantor who agrees to make repayments on the loan if the borrower cannot keep up with them. Your guarantor will usually have to have a good credit score, which will be determined by a credit check conducted by the lenders.

 

How to Boost My Credit Score for a Credit Check 

 

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Whilst there are lenders who accept borrowers with bad credit scores, you can apply for larger amounts at better rates by improving this rating. Having a good credit rating makes you more credit-worthy, and can show lenders that you have a good history of financial borrowing.

You can improve your credit score by taking out a loan and keeping up with the repayments, as this creates a history of good financial borrowing that will be recognised by the UK’s CRAs. You can also improve your credit score in various other ways, including limiting the amount of credit applications you make.

Frequently applying for credit in a short period of time can lead lenders to think you’re too reliant on credit, and therefore more high-risk. Having excessive amounts of hard searches can also affect your credit score. Therefore its best to limit applications, and to space them out over a longer period of time.

 

How Important Is a Credit Check?

 

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Credit checks can be one of the main factors determining success or rejection of an application. However, with lenders who accept bad credit, these checks can be less of a determining factor.

It’s important to check the requirements for borrowers when applying for a loan, and when having bad credit, only going for those who accept this. Visit our compare loans UK page for further details.