Representative Example: Rates from 49.9% APR to max 1333% APR. Minimum Loan Length is 1 month. Maximum Loan Length is 36 months. Representative Example: £250 borrowed for 30 days. Total amount repayable is £310.00. Interest charged is £60.00, annual interest rate of 292% (fixed). Representative 669.35% APR (variable).
Unfortunately, no matter what you might have seen during your last Google search, we’re here to tell you the truth about loans without a credit check. Simply put – they don’t exist, at least not from lenders that you can trust. That’s because the Financial Conduct Authority – the group responsible for regulating all loans in the UK, is required to conduct a credit check on every lender – like it or not.
While credit checks aren’t designed to make your life harder, they certainly seem as though they are. After all, if you don’t have the best credit rating, it often feels like you need to jump through endless hoops just to earn the attention of a lender. Even if you can convince someone that you’re worth lending to, there’s a good chance that you’re not going to get their best interest rate if your credit rating isn’t up to scratch.
According to the FCA (Financial Conduct Authority), all lenders need to conduct credit checks on their customers. That rule applies whether you’re applying for a personal loan, a payday loan, a £5,000 loan or something else entirely.
A credit check isn’t just there to protect the lender by making sure that you can afford to pay back what you borrow. These evaluations are also designed to defend you from making dangerous decisions with your money. If your credit makes it seem like you have a bad habit of taking out cash and not paying it back, then your credit agencies will reject your loan to protect you from further financial issues.
When a company conducts a credit check, they’re looking for:
If a company offers a loan without a credit check, they’re doing one of two things. The first option is that you’ve come across a company that is acting against the rules and regulations of the Financial Conduct Authority. This business doesn’t have your best interests at heart, because it’s willing to offer instant payday loans to anyone – whether they can afford it or not.
The other option is that you’ve come across a loan provider that can approve you for something short-term like a payday loan, without having to conduct a hard credit pull first. These providers will still need to conduct a soft credit check to ensure that you’re not bankrupt or dealing with any serious financial problems, but the hard credit pull that leaves a mark on your file won’t come until after you accept the loan.
Payday lenders like the ones that we work with here at Boutell can conduct a soft credit check and an affordability check on their customers, rather than a hard credit pull. This means that there’s no mark left on your file by people searching through your credit history details. As you may already know, every hard credit pull conducted by a lender leaves a fingerprint on your credit report. The more fingerprints you have, the less likely you are to be offered a loan.
Short term loan providers can afford to offer you a loan based on the smaller amounts of information they get from a soft credit check because they’re not taking a particularly large risk by lending to you. They know that you’re only going to be borrowing a small amount of money and paying it back quickly, so they’re very well protected.
At Boutell, when you come to us in search of a quick loan to help you deal with an emergency situation fast, we approach lenders who can conduct soft credit checks, so we can bring you a list of people that can approve your request for money. This speeds up the application process and makes sure that you don’t have to waste time applying for a loan with multiple providers.
At the same time, because you don’t have to worry about anyone conducting a hard credit pull until you’re ready to agree to a loan, you can protect your credit rating and stop black marks from building up on your file.
First and foremost, you get to take another step towards protecting your credit rating. If you know that you don’t have the best credit score already, then the last thing you want is to tarnish it with fingerprints from companies conducting a wide variety of credit checks. What’s more, taking out a quick loan and paying it back within the same month gives you an excellent opportunity to improve your credit score. It shows the credit bureaus that track the spending habits that you can be trusted to pay back what you owe on time.
When other lending providers refuse to give you the money that you need, payday and short term loans can be one of the easiest ways to prove that you’ve turned your life around. Just make sure that you avoid any companies that claim they can really offer you a loan without any credit check whatsoever. Other benefits of these quick loan options include:
Payday loans haven’t always had the best reputation, but they’re excellent for people who are worried about things like credit checks and credit scores. Not only is it possible to reduce the impact on your credit score when you apply for a short-term loan through the use of soft credit checks, but you’ll also find that you’re more likely to be approved by a payday lender too.
Credit providers in the payday lending environment are more likely to approve you based on your current affordability levels, rather than focusing on your credit history. They look at things like whether you have a regular source of income now and a long-term job to see whether you’re a good risk. This gives you an excellent opportunity to start borrowing money again quickly when you need it most. What’s more, because approval is given rapidly, and payments are given fast too, this kind of lending is particularly useful for those emergency situations when you might not have enough cash in your savings to pay for the things that you need.
While a personal loan provider or a traditional loan company might ask you to jump through endless hoops with a complicated application process, or request a hard credit pull immediately, a payday loan provider doesn’t come with the same requirements. You can find a wide variety of excellent loan opportunities from payday lenders, just make sure that you avoid anyone who claims that they can give you the money you need without any credit check whatsoever.
As annoying as a credit check might seem to be at first, the truth is that they’re there to help you and the lender to avoid a sticky situation. Any lender that can offer you a true no credit check loan doesn’t have your best interests at heart.