If you know that you have a poor credit record, then a no credit check loan may be for you. When you apply for credit, it can sometimes be represented on your credit report and if you’re looking to avoid this, then traditional finance options might be off the table for you. A no credit check loan does exactly what it says on the tin. Of course the lender will still need to know that you can repay the credit and so an individual voluntary arrangement (IVA) or identity check may be carried out instead.
Why choose a no credit check loan?
You may choose to apply for a no credit check loan for a number of reasons:
- Privacy – When lenders or brokers check your credit history, the whole process may feel invasive and time consuming.
- Improving Credit Status – Successfully repaying the financial agreement can actually have a positive effect on your credit score and rating.
- Bad Credit History – If you have a poor credit history, you may be struggling to get accepted with other forms of finance.
What to consider before applying for a no credit check loan
Interest charges – As with most variations of a financial agreement, there are interest charges with a no credit check loan.
Length of loan – The actual term of the finance is generally a lot shorter than other credit agreements in order to lower the risk for the lender that their loan is defaulted on.
Small loan amounts – If you opt out of having a credit check performed on you, the chances are that you amount you will get accepted for will be a bit lower. This is to protect both the lender and the borrower. This is because it can be a large risk for a lender to provide finance to someone without collateral and a history of defaulting on payments. In addition, it protects the borrower as it ensures you don’t borrow more than you can afford to repay.
If you want to learn more about improving your credit rate and managing your money visit the Money Advice Service at moneyadviceservice.org.