Credit Score Basics > Can you get a loan without a credit check?

Can you get a loan without a credit check?

Wollit Team3 minute read · Updated 4th July 2024

No, you can’t get a loan in the UK without a credit check. At least not one from a legitimate, regulated lender.

This is because all lenders authorised and regulated by the Financial Conduct Authority (FCA) are legally required to run credit checks as part of their assessment before approving a loan.

So, if you see some lenders advertising “no credit check loans”, you should know this is misleading. They will likely perform a soft credit check initially to assess eligibility, and if approved, they will then run a full hard credit check before issuing the loan.

Loans offering money that are actually without credit checks are only offered by unauthorised, unregulated lenders. This is illegal for them and extremely risky for you. Not only would you deal with a shady company, but you might also end up in a debt spiral. Good, reputable lenders have to treat customers fairly.

In short, avoid any lender claiming to offer loans without credit checks.

Not even a payday loan?

Especially not a payday loan. Payday loans have incredibly high APRs (sometimes as high as 1,000% per year) and are not meant to be “rolled over” but instead paid as soon as possible.

Search the web, and you’ll see plenty of reports of people who ended up in disastrous situations because they couldn’t pay a payday loan on time and ended up in a debt spiral, which ended in homelessness or worse.

Now, imagine this sort of loan from a company that is also operating illegally.

How about instalment loans?

Same. All loans in the UK, including short-term loans, payday loans, and instalment loans, require a credit check as part of the application process. Lenders regulated by the Financial Conduct Authority (FCA) are legally obligated to run credit checks to assess your ability to repay the loan.

Should I be worried about a credit check?

Not really. Here is what you need to know about a credit check:

Credit checks protect both you and the lender. These checks help lenders figure out whether you can afford to repay the loan. Why would you want a loan that you can’t afford to repay?
It’s a sign that the lender is regulated. Again, this protects you and ensures that the loans are affordable and that lending practices are fair and transparent.
You’ll usually be able to know if you can pass a hard credit check without going through one. The way to do this is by going through a “soft check”, which is what an eligibility calculator, for example, does. Most lenders will have a “check my eligibility” button on their website. Make sure to use it first.

In other words, while avoiding a credit check may seem appealing and less risky, it’s more dangerous not to go through one. It’s also a crucial step to take to ensure you’re dealing with reputable and regulated lenders.

What if I have bad credit or no credit history?

There are situations in which you might be concerned about a credit check because of something in your past. You may have missed a few payments before. Or you defaulted on a loan. Or even declared bankruptcy.

You might also be concerned if you just moved to the UK and don’t have a credit history at all.

The main things to remember here are:

Some lenders offer loans even for people with no credit history or bad credit. The terms will be pretty bad (high fees, high interest rates, low amounts), but they exist.
Negative things on your credit report (called “adverse events”) will only stay there for 6 years. After that time passes, you don’t need to worry about them anymore.
Many lenders will also consider applications if “sufficient time” has passed since an adverse event. For example, a default that happened four years ago will carry less weight than one that occurred this year. Go through the eligibility checker and see what the lender thinks.
The main thing that matters is that your credit history and score keep improving.

To establish or rebuild your credit history, here is what you need to do:

Register to vote at your current address.
Open a UK bank account and get a mobile phone contract (if you’re new to the UK).
Get a credit-building tool like a credit builder card or a credit-building app.

One such app is Wollit. Wollit works by reporting a fixed fee monthly subscription as a loan repayment to credit reference agencies (Experian, Equifax, and TransUnion). This helps you build or rebuild your credit history by showing you can pay debt on time.

It can even report your monthly rent payment to Experian, adding another line in your credit report that shows lenders you’re responsible and pay your bills when they’re due. In time, this will help you improve your credit score, so you won’t need to worry about credit checks ever again.