Is it Possible To Find a Lender Who Doesn’t Perform a Credit Check?
Payday loans are one of the most misunderstood lending options in the UK, but they’re also becoming one of the most popular choices for quick borrowing too. When you need to access money quickly without any complicated application processes or long-term repayment strategies, payday loans are the way to go. These lending solutions are ideal for dealing with emergency situations when you just can’t afford to wait until your next payday.
However, while cash loans for bad credit are often easier to successfully obtain than most traditional or conventional loans, that doesn’t mean that everyone will automatically be accepted. Just like any other lender, a payday lender will need to consider your credit history to determine whether you can actually afford to take out a loan.
When you’re dealing with an emergency situation, you may even be tempted to search for a lender that can provide you with money, without taking your credit into account. As a result, it’s tempting to start looking for payday lenders with no credit check requirements.
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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).
The Truth About Credit Checks and Payday Loans
When you search for payday lenders with no credit check on Google, you’ll find dozens of companies claiming to offer the cash you need without a conventional credit check. However, more often than not, this typically won’t mean that the lender isn’t going to conduct a credit check at all.
A credit check is the process of pulling information from a person’s credit history to see what their relationship with cash is like. If you’ve had trouble paying your bills or debts in the past, then your credit score is likely to be bad. A poor credit score can make it difficult to borrow money, because your lenders are required by the FCA not to give cash to people who can’t afford to pay it back.
So why do companies claim to offer loans without a credit check?
When a loan provider tells you that they’re not going to conduct a credit check on your account straight away, what they actually mean is that they’re not going to do a hard pull – at least not until later on. A hard pull is the kind of credit check that conventional banks, financing providers and credit bureaus do to determine if you’re eligible for a loan.
Hard pulls are extensive credit checks that leave a mark on your credit rating and show other companies that you’ve been evaluated by other loan brands. The more marks you get from hard pulls, the worse your credit score becomes. Basically, they tell your lenders that you’re either too reliant on borrowing money, or that you can’t get other companies to lend to you.
So What Makes Payday Loans Different?
Payday loans and online loans are a newer, more informal kind of lending. They don’t require the same complicated application processes, because your lender is only giving you a small amount of money for a shorter period of time.
So can payday lenders give you loans without a credit check?
Well, no, not exactly.
The regulatory lending environment managed by the FCA, or financial conduct authority in the UK means that all lenders, whether they’re payday providers or otherwise, must conduct a credit check. The main difference with payday lenders is that some of them can conduct soft credit checks before they do a deep dive into your credit history.
If you look for payday lenders no credit check with a broker like Boutell, you fill out a single application form that includes all the information a lender may want about you. This form will include details on how much money you want to borrow, and what your current borrowing situation is. When we approach lenders with your information, they do a soft credit check.
Through a soft credit check, your lender can determine what your history with finances is like, whether you’ve had a bankruptcy, or if there’s anything else that could be stopping you from getting a loan. Lenders can use soft credit checks combined with your loan application to see whether you’re likely to be eligible to borrow from them.
Using a soft credit check, you can reduce your risk of ending up with multiple black marks on your credit history, because you know the company that you decide to borrow from has already determined that they’re probably going to say yes to your loan.
Getting Approved by a Payday Lender
Because they often conduct soft checks before hard pulls, payday lenders can generally make getting the money you need to deal with an emergency much easier. What’s more, these lenders are often a lot easier to borrow from in general. After all, payday lenders are only giving you a small amount of money for a short period of time, so they’re willing to take more risks with people who don’t have the best credit history.
Your lender for a payday loan doesn’t necessarily have to do a full hard credit check to ensure that they’re going to be able to lend to you. Using the basic information that they get from your soft credit check, and your loan application, they can let brokers know whether you’ll be pre-approved for a loan. This makes it much easier for you decide who you want to borrow from.
Usually, some of the main criteria for being approved for a payday loan will include:
- You’ll need to be a legal adult in the United Kingdom. This means that you need to be a resident of the UK, and you also need to be over the age of 18.
- You’ll need to be free of any other active loan balances when your application is made. This will help to ensure that you can afford to pay the loan back.
- You need an active bank account that your loan money can be paid into. You’ll also need to have communication details companies can use to get in touch with you.
- You’ll need to be in employment with a regular income that you can use to pay back the loan. If you’ve had a job for an extended period of time, you’ll be more likely to be successful.
Overcoming Bad Credit
When your credit isn’t perfect, a loan provider like a payday loan company or online lender can make it easier to get the money that you need. When you work with a broker like Boutell, you can boost your chances of finding a lender that’s sure to approve you no matter what your situation might be. What’s more, you’ll know that testing the water with different lenders won’t harm your credit rating any further.
However, it’s important to think carefully about how you’re going to overcome your issues with credit in the long term. If your score has gotten bad enough that you’re already looking for lenders that don’t conduct a credit check, then it’s clear that you need to work on your credit history. Remember that bad credit doesn’t just affect your ability to borrow from lenders. Sometimes, a poor credit rating could also make it harder to rent an apartment or get the job of your dreams too.
Payday loans can help with your credit in a number of ways. For instance, when you borrow money with a short term loan, you can start by looking at companies that conduct soft credit checks instead of hard pulls. This means that there are no fingerprints left on your file. Additionally, because the loans are short-term in nature, you’ll be able to pay back what you owe quickly, without running the risk of missed repayments.
A short-term loan provider can give you your money within less than 24 hours, and you pay that cash back within a month or less, proving to the credit bureaus that you know how to commit to the terms of your lending agreement. However, there are also other things that you can do to improve your credit rating in the long-term too.
For instance, signing up to be part of the electoral roll is a good first step, as it boosts your chances of having accurate information in your credit history. It’s also important to make sure that you set up direct debits and automatic payment schedules whenever you have bills to pay or loans to manage, as this will make sure that you’re never late with your payments.
Getting Cash with a Bad Credit Score
For years, people all across the UK assumed that if they had bad credit, this also meant that they wouldn’t be able to borrow the money that they needed. However, the truth is that payday lending and cash advance solutions are making it easier for anyone to get the cash that they need. Having a poor credit score doesn’t have to stop you from borrowing money anymore.
While it’s important to work on improving your credit score whenever you can, in the meantime, you know that you have brokers like Boutell to help you get the cash that you need in a hurry, when you need it most.