We can often hear about no credit check loans and you may wonder whether they actually exist and what they actually are. It can seem mad that lenders won’t do a credit check and some people might be aware that lenders are actually required to do a credit check by law. So, what is a no credit check loan?
What are no credit check loans?
It is good to understand that although there is no such thing as a n credit check loan, there are loans which could be very close to this. The reason there are none of them is that lenders have to do a credit check. However, there are different ways of doing a credit check and different reasons for it.
A normal credit check, often referred to as a hard credit check, will show the lender your credit report. It will also leave a trace on your credit report that the lender has made a check on it. This is something that many people do not like. This is because they feel that it will not look good on their credit report that lenders have been looking on there. This could especially be the case with short term lenders such as payday lenders and they worry that this might put off more traditional lenders. It is also the case that if lenders can see that lots of other lenders have been doing credit checks then it might them off. They may see it as an indication that you are desperate for money and that might put them off lending any money to you at all.
A soft credit check is a way of looking at a person’s credit report without it leaving a trace. This means that they will be able to take a look at a person’s ID as well as checking if they have a regular income and things like that. It can be useful to the lender but they will not leave any evidence that they have looked. It will be the same as if you had looked at it.
Who are they for?
You may wonder who the no credit check loans are for. They tend to be aimed at people who have a poor credit record and therefore want to do everything that they can which will keep their credit record as good as possible. It is also highly likely that they will not be able to get traditional loans because of their credit rating not being very good. This means that their only choice might be this sort of loan, where credit rating is not a factor in whether they are likely to be accepted for the loan. However, this sort of loan is also arranged very quickly. This means that if you need money in a hurry then they might be very useful for you. If you have no other means of borrowing that quickly and you need money in a real emergency then the loans can be extremely useful. It is therefore worth still considering this option even if you do have a good credit record.
Are they right for me?
If you have a good credit rating then you will be able to choose between lots of lenders, if you do not have a good credit rating then you may find that you will be limited to the no credit check loans. Therefore, if you do have a poor credit record then these loans could be right for you. However, even if you do have a good credit rating, it is best not to assume that these loans will not be any good for you. You never know whether they might have features which make them more attractive to you than other loans. They can be extremely quick to arrange which might be useful if you need money in an emergency and more traditional lenders might be a lot slower, so there could be situations where you will find them useful even if you have other options. It is always worth comparing everything that is available to you because it is important to make sure that you find the very best loan for the job. If you do not do this research and consider everything then you may regret your decision or find that you have a loan that is not best suited for what you want, that you cannot pay back easily or that is too expensive. It is well worth doing the research and spending the time doing it because you will be able to know that you have made the best possible decision that you could and you will not be able to regret your choice. Otherwise, if the loan turns out to not be the best decision for you, you may wish that you had taken a lot more time to make your decision.