Truth about Bad Credit Loans and No Credit Check Claims

If you are struggling with bad credit score, it is likely that you are searching for loans with no credit check. For every credit check makes a mark on your credit report and affects the score. However before you fall prey to no credit check loan offers online, know about the truth behind.

What is credit check?

A credit check is initiated by a lending company to assess a borrower’s credit worth. A credit check helps lender know about the risk factor involved in lending the amount. However without a credit check, a lender could never be sure about the repayment of loan. So why would a company lend in a dark?

Likewise a credit check helps borrower know if they could afford the loan and repay on time. Thus you being a responsible citizen of the UK should never borrow without a credit check.

Soft credit check and hard credit check

When a lender enquires your credit score for lending loan or other credit products, such queries are termed as hard credit check. Each and every hard enquiry is noted in the credit report and thus it affects the score. When an individual or a business raises too many hard enquires in a short span of time, it indicates a credit hungry nature of the borrower. This in effect hurts the score.

While the soft credit check is a soft enquiry made on your credit report for other than credit purposes such as for employment, TV connection or other miscellaneous reasons including pre qualification for a credit card. These queries are termed as soft queries and they are not initiated as a result of your request for loan.

Thus you should always ensure that hard queries are never made casually on your credit report.

Is it possible to draw a no credit check loan?

FCA which is the financial watch in the UK has strictly laid out its guidelines for safety and security of borrowers. According to FCA restrictions no lender can extend a loan without a credit check in the UK. So anyone who claims to provide no credit check loan could be a scrupulous loan shark. A lender can only ensure a soft credit check and ensure no footmark on your credit report instead.

Besides when you have bad credit worth, a loan rejection is not unlikely. A loan rejection further adds a red flag in your report. Thus it is important here to know how to ensure a soft credit check and save your score.

Loan brokers vs Loan lenders

Being a borrower it is not easy to convince a lender to not make a hard check on your report as they are required to report it to the credit bureaus. Also, you cannot raise a query to multiple lenders all along. As difficult it is to locate a bad credit lender as is to ensure no credit check on a personal level.

So whether you need a short term loan on instalments or an instant cash advance, you should contact a loan broker. A broker can initiate a loan query among a pool of lenders. With his expertise he can ensure soft credit check by each of the lenders and help you save your score. 

 

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