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Whether you are a first time borrower or a returning customer, Loan Broker is always your trusted friend.

Here is some free professional advice to help secure and enhance your financial future.

Are no credit check loans a myth?

There are a number of loan companies on the market that advertise ‘no credit check loans’ for people with poor credit who may struggle to be accepted for finance elsewhere. But are there really such things as ‘no credit check loans’?

In this article, Loan Broker looks at…

  • What is a credit check?
  • Who puts them together
  • How they’re used by lenders
  • The process of applying for a loan and how credit checks are used
  • The truth about no credit check loans
  • Bad credit loans versus no credit check loans
  • How to apply for a bad credit loan

Soft credit check versus full credit check

Credit checks are used by loan companies every time you apply for credit. These are carried out as part of the standard series of affordability tests required by lenders to make sure they can lend to you responsibly.

 A full credit check involves looking at your credit report to decide whether you are a high or low-risk borrower. Everyone has a credit report – even if you’ve never actually seen it. They’re like diaries showing your financial and borrowing behavior over the past six years.

 ‘Full’ credit searches record your entire credit history; including every loan application, every late payment, and every loan acceptance or refusal you’ve had. When performing a full credit check, lenders can even see every other loan provider that has checked your credit history.

 That’s because full credit checks actually leave a footprint on your credit file. And because all future lenders can see when you’ve applied for finance, it’s often a good idea to space out your loan applications as, believe it or not, this can also damage your credit score.

 The more loan applications you make in a short space of time, the more it suggests, whether right or not, to lenders that you’re struggling to manage your finances effectively.

There is another type of credit check though. ‘Soft’ credit searches give a general overview of your credit report. They give lenders a good idea of your borrowing behavior without leaving a mark on your report and affecting your credit score in the process.

Lenders are legally required to carry out a full credit search when you officially apply to them for credit. Whether you are accepted for the loan or not, this will show up on your report for a minimum of six years.

Loan brokers, on the other hand, are able to perform a soft credit check to match you up with the lenders most like to accept your the first time. That means you can protect your credit report while they make multiple applications on your behalf.

What’s recorded on my credit report?

 Your credit report is a file that contains all the personal and financial information about you that a loan provider might need. That includes personally-identifying information like your name, your address, how long you’ve been living there, and who lives there with you.

Once they can be sure you are who you say you are, lenders check all past and present financial credit agreements that you have. This covers all:

  • Loans
  • Bank cards
  • Credit cards
  • Mortgages
  • Auto loans

This will also include records of when these accounts were opened, the loan amount, or your credit limit, and they keep track of any missed or late payments. That’s why your credit report can make or break a loan application.

Your credit report also includes information that is on the public record, such as any bankruptcies, debt management plans, or Individual Voluntary Arrangements.

What is a credit score?

 Your credit score is a number that’s calculated using all the data in your credit report. Every repayment, loan that you’ve settled, and every bill you’ve paid on time is balanced against the negative information on your file to come up with a number.

These scores are not universal as each credit agency have their own scoring systems in place. For example, Equifax measure credit scores between 300 and 850, where Experian credit scores run from 0 to 999.

Your credit score records how you handle repaying debts and managing your daily finances in general. That’s why lenders always take your rating into consideration when assessing your loan application along with the additional information you provide.

This lets them know what kind of borrower you are, how you have managed repayments in the past, and if you meet their eligibility criteria. All of this helps them make an informed decision on whether you’re the right borrower for them.

Which companies put together my credit reports?

As we mentioned above, there are more than one credit reference agencies in the UK which your chosen lender may approach to see your credit report. These are Equifax, Experian, and CallCredit.

 These agencies take all of the information supplied to them by lenders you’ve borrowed from in the past as well as how you handle your bank account, whether you pay the credit card company the minimum amount and even your payment track record with utility providers to compile your credit history report.

 This report is then updated around once a month to ensure the data included is accurate. Once an item is filed on your report, it stays there roughly six years before it is removed. This can make it particularly difficult for those with poor credit ratings to be accepted for credit straight away.

 Why are credit reports so important to lenders?

Your credit report is really important to lenders reviewing your loan application. That’s because they give the lender an idea of how likely it is you will repay the money.

 Good credit ratings and strong payment histories show lenders that you have experience in managing credit responsibly. That means there is less risk in lending to you so lenders are more likely to accept you for credit.

 While it may not always be the case, people who have struggled to meet loan repayments on time in the past appear more likely to default on their loan.

 In addition, legally, lenders also have an obligation to ensure that you do not make your financial situation worse by taking out a loan you can’t afford.

What happens when I apply for a loan?

The first thing you need to do is fill out a form that tells a payday or short-term lender how much you would like to borrow, how long you would like to borrow the money for, and where the money will come from to pay off your loan. Specifically, what income you have and how much you can put away each month to make the repayments. A lender then conducts a credit check on you to determine how likely it is that you can pay off the loan based on how you have paid off credit in the past.

With a broker, it’s different. We take the details – not the lender direct.

We then send the information you’ve given us straight off to our network of lenders. They will each review what we have sent them and they will give us their best offer. This happens in a matter of seconds. We then gather up all of the best offers and compare them for you.

A lender may want to make you an offer if you provide some further information to them. If this is the case, we will ask you any questions that the loan provider would like the answers to and the process will continue from there. Alternatively, someone from the customer services team of the lender may contact you instead of one of our team – it depends on the lender.

One of the benefits of going through a broker rather than approaching a lender directly is that each lender has their own criteria for who they will lend to. We know what these criteria are so you can rest assured we’ll only present you to the most suitable lenders.

No credit check loans – the truth

 There is no such thing as a “no credit check loan”. This is because each loan provider in the UK is regulated by the Financial Conduct Authority (FCA). One of the FCA’s guidelines is that all personal loans require a credit check to ensure that you are able to make the loan repayments on time and in full.

While it might sound like not having your credit score checked is a good thing if you have bad credit, it’s actually a good thing. That’s because, without these checks, it might mean that you are far more likely to sign up for a loan that you cannot pay off.

This could result in you spiraling into debt because of fees and penalties because you weren’t able to pay the loan back on time. Credit checks are there to keep borrowers safe more than anything else.

Bad credit loans versus no credit check loans

 A bad credit loan, on the other hand, is a loan that is available to anybody with a low credit rating. Lenders who make loans to people with bad credit are more concerned with your financial situation today and not any difficulties you might have got into a few years ago. This means that no matter what your credit score is, you will still have a good chance of getting access to short-term finance you need to help out for emergencies.

The drawback to these kinds of loans is that they normally have a higher APR than other forms of personal loans. This means that the loans are slightly more expensive than for people with a good credit rating.

Get the cheapest no guarantor bad credit loan from licensed lenders with LoanBroker

LoanBroker is a broker – not a lender. This means that we submit your loan application to our vast network of FCA-authorised lenders. Because of this, we are able to find you the cheapest loans – no matter what your credit score is.

We get such good results for customers by having a close relationship with all of our partner lenders. Once you submit your application to us, we send it to them and they come back with their best offer in a matter of seconds. You won’t have to fill out a tonne of paperwork and wait for days to get a loan with LoanBroker.

To get started, simply click here to fill out our application form.

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Representative APR Example

The rate you are offered will depend on your individual circumstances.

All loans are subject to status. The interest rate offered will vary depending on our assessment of your financial circumstances and your chosen loan amount.

Representative APR Example: On an assumed loan amount of £2,600.00 over 36 months. Rate of interest 41% per annum (fixed). Representative 49.7% APR. Total amount payable £4,557.89 of which £1,957.89 is interest. 35 monthly repayments of £126.61 and a final payment of £126.54


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Loan Broker ( is a credit broker and not a lender