Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk.
Please note: High-cost short-term credit is unsuitable for sustained borrowing over long periods and would be expensive as a means of longer-term borrowing.
If you haven’t borrowed in the UK, perhaps because you’re young or new to the country, then you won’t have much credit history. Although it might not seem fair, the reality is that a limited credit history means a lower credit score. And in cases where the credit reference agency (CRA) simply has no information to go on, they may not be able to generate a score for you at all.
The system of having to have credit to get credit — unless you take out something like a guarantor loan — can seem impossible.
If you’re stuck in a spot where you need to borrow cash fast, traditional personal loans from banks generally require good to excellent credit, and you may be considering a payday or short term loan.
It may be diffiult, but not impossible, to get a loan with a very low credit score or no credit score. If you’re considering a payday loan, here’s what you need to know about qualifying and credit scores.
The short answer is no, you don’t need a credit score. If you’ve stumbled along the way financially or you haven’t yet built a credit history, you could still qualify for a payday loan.
Legitimate lenders must lend responsibly, so they will always run a search on your credit file, but that doesn’t necessarily mean they’ll rule you out based on the report they get back.
This doesn’t mean you’re guaranteed a loan, however. You still have to meet the other eligibility requirements, and perhaps most importantly, you have to be able to demonstrate that you can afford the loan. If you come across a provider promising guaranteed approval, be wary — a legitimate lender will not make promises it can’t always keep.
You’ll generally see different criteria based on the lender you’re considering. But there are a few universal standards that you can expect. In general, you must:
Responsible lenders will always run a search of your credit history before approving a loan application. This will be a “hard” check, which leaves a mark on your file for up to two years, and has a slight negative effect on your credit score (usually short lived).
It’s often possible to check your eligibility for a loan before applying, using a “soft” search, which won’t affect your credit score. This is a smart way to protect your credit file from getting off on the wrong foot.
Some lenders may claim to offer “no credit check payday loans”, and you’d be correct to question the legitimacy of the lender in this situation.
To make sure you’re applying with a legit lender, you can always check that the company is authorised and regulated by the Financial Conduct Authority (FCA) by searching its register.
If you have bad credit because of missed payment or defaulting on previous loans, you may want to reconsider taking out another loan, and consider alternatives.
Browse our collection of payday loan guides, designed to answer all of your short term loan questions and help you find the right payday loan.
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QuidMarket offers an instant decision on loans of up to (or for returning customers) and once approved, you can expect the money in your account on the same day. QuidMarket will consider you for a loan even if you have a bad credit history. Find out how other lenders compare.
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