Credit check

No Credit Check Loans – What Are Your Options? CashLady

It is completely understandable that some people are reluctant to undergo a credit check. If you have a bad credit history or have made financial mistakes in the past, you may be worried that a credit check will result in your loan application being declined and your credit rating still more damaged.

The good news is that there are lenders on our panel who specialize in offering bad credit payday loans to those with bad credit. Plus, our application process lets you check whether or not a lender is likely to accept your application, without hurting your credit score. To do this, we perform a “simplified search” in your credit report. You can read more about credit checks and indirect credit searches below.

What is a credit check?

A credit check is a review of financial information held about you by one of three UK credit reference agencies – Experian, Equifax and Transunion.

This review helps potential lenders see how you have handled credit in the past and gives them an indication of how likely you are to repay your loan and therefore how much risk you would pose to them if they chose to lend you the requested money. .

It is important to note that there are two different types of credit check. A soft credit check and a hard credit check – the difference between each is explained below.

What is a firm credit check?

A thorough credit check is when a lender reviews everything on your credit file.

This is the type of check that a finance provider, bank, or building society will use if you are applying for credit. They look at almost every type of account you have that you make regular payments on, for example, credit cards, mobile phone bills, and mortgages.

They check your credit report to see if you’ve missed any payments. They can also normally know what your overall debt level is (i.e. both your unsecured debt and your secured debt like mortgages).

Firm credit checks stay on your file for 12 months, although some, like debt collection checks, may stay on your file for longer. Each company that consults your file can see who carried out these checks and why.

What is a soft credit check?

A soft credit check is an investigation into your credit report to review certain information from your credit file.

Companies perform simplified searches to determine the success of your loan application without having to perform a “hard” credit check.

It’s like a background check to get a quick clue.

Software searches aren’t visible to other companies, which means they don’t impact your credit score.

other companies don't see the results of soft checks

What is a lender looking for?

Information a lender will typically review during a credit check includes:

  • All loans, credit cards and mortgages you have currently opened or closed at any time in the past six years
  • Any overdrafts on your current bank account
  • Details of previous occasions when you missed credit repayments
  • Details of Previous County Court Judgments (CCJ)
  • Any previous bankruptcy

Together, this information is your “credit history.”

types of records that make up your credit history

Can I get a loan without a formal credit check in the UK?

In the UK, no lender should offer a loan without carrying out a ‘hard’ credit check – that would break regulator rules. The regulatory environment for short-term funding in the UK has become stricter in recent years – for example, there are now restrictions on:

  • The interest rates a lender can charge
  • The number of times a loan can be refinanced
  • The amount a lender can charge you in fees if you fail to repay the loan

Businesses that don’t follow the rules can be fined or ordered to compensate customers they may have treated unfairly. In severe cases, the regulator can revoke a company’s license to act as a lender.

If you have a complaint about your lender, you can submit the matter to an independent arbitrator at Financial mediation service. The financial ombudsman has the power to compel financial companies to compensate customers who have been disadvantaged by it.

This strict regulatory environment should reassure you. If you are dealing with an authorized and regulated lender, financing provider or credit broker, you are dealing with a company or organization that is subject to a wide range of rules and guidelines and has a legal obligation to treat you fairly. always. One of the regulator’s operational objectives, set by law, is to “ensure an appropriate degree of consumer protection”.

However, that doesn’t mean you can’t get a loan quickly. Technology and data analytics help lenders make a quick decision about affordability and risk when taking out a loan.

Should I consider a no credit check loan?

Should I consider a payday loan without a credit check?

If you deal with a lender that offers a loan without a credit check, you should avoid them at all costs. Any finance provider who suggests they can provide a loan without a credit check will be breaking rules set by the Financial Conduct Authority (FCA) and likely offering to lend money illegally. As a consumer, you will also not be protected by the FCA.

Are payday loans without credit check legal?

Lenders must perform some form of credit check before making a decision on a credit application. Unsecured loans, including payday loans, are regulated by the Financial Conduct Authority (FCA), whose rules state that proper credit checks must be carried out on all applicants.

If you are dealing with any person or company not authorized or regulated and authorized by the FCA, you must not enter into any form of credit agreement for your own safety.

What are the legal aspects of a loan without a credit check?

Are payday loans no credit check safe?

In a word, “No”.

We will consider a loan ‘safe’ only if the credit provider is authorized and regulated by the FCA and you can comfortably make the required repayments.

No lender should offer you an unsecured loan if they have not first carried out a ‘rigorous’ credit check, as this would violate FCA rules and put you at risk.

If a company says they are willing to give you a loan without a credit check, it may suggest that the company is not actually authorized or regulated by the FCA and is therefore operating illegally.

If you chose to do business with an unlicensed and unregulated company, you would have no legal protection if things went wrong. You would also not be able to refer any complaints about this company to the Financial Ombudsman Service. Before dealing with a financial services company, you can check whether it is authorized and regulated on the Financial Services Registry.

CashLady is authorized and regulated by the FCA to act as a credit broker, and we only work with lenders who are also authorized and regulated by the FCA, so you can be sure that any loan acquired through our site is ” safe”.

Why is a credit check important?

Credit checks are important because they protect customers from bad credit decisions and avoid unaffordable credit obligations. Credit checks are important for lenders so that they can minimize any risk of bad debts.

The credit check process is used by lenders to determine the level of risk involved in lending you money and whether you are likely to be able to make the required repayments and repay on time.

Why is a credit check important?

When you apply for a loan, the lender will pay a fee to access your credit file. Records of your personal credit history may be kept by any of the three main credit reference agencies in the UK: Experian, Equifax and Call Credit.

Checking your credit report usually involves two steps. The first is usually a soft online verification to identify you, prevent fraud, and verify the level of risk and affordability of the loan. After the initial approval, there is a second stage, before the actual loan which involves further verification where the lender must absolutely ensure that you can afford your loan. They also want to make sure they can contact you if there is a problem. This is called a “rigorous” credit check.

The following information is included in a credit check:

  • Information on voters lists – used as proof of your current and previous addresses
  • Loans, credit cards, and mortgages you are currently paying off, as well as any debts you have paid off in the last six years
  • Any current account overdrafts
  • Details of how often you have missed repayments on credit products
  • Any previous bankruptcy or county court judgments (CCJ)
  • Full details of when your identity may have been stolen for fraudulent purposes

Credit checks also take into account the record of anyone with whom you have a financial relationship. For example, if you have a joint account with your partner or someone else, and that other person has a bad credit history, it could hurt your own chances of being accepted for a loan. This is because the lender may assume that you are paying the other person’s bills and this could put additional strain on your own financial affairs.

All of this information is used to determine your “credit score”. It can be anything between 0 (very bad) and 999 (very good), according to Experian (but these scores can differ depending on the credit scoring tool you use). Some lenders may automatically reject any applicant who scores below a certain level.

Any “rigorous” credit check performed on you will leave a “fingerprint”, i.e. there will be a mark on your credit file indicating that a check has been performed. If many checks are carried out on your file in a short period of time (6 months), this could harm your chances of being accepted.

Can I do a credit check myself before applying?

You can always contact one of the credit reference agencies to check your credit score. You will be able to do this without hurting your score.