Credit Checks and Payday Loans – What You Need To Know

In the UK, there are three companies which perform credit checks based upon some pretty strict criteria. Unless you are looking to get a ‘no credit check payday loan’, your application for a loan is going to be checked first.

It may look as if the only reason for the existence of these companies is to protect the lender, but they actually protect us, the consumer, as well.

Know Your Credit Rating and Avoid Problems

When you apply for a loan the first thing that happens after you fill out the application form, is that your information is passed on to one or several of the companies mentioned above.

They look at your information and cross-reference it with their data. Their database holds various kinds of information: Electoral roll; bankruptcies; court judgments. They also look to see if you’re in employment and if your income is paid into your bank account.

During this check, any information related to your payment history on loans, credit cards, mortgages, even mobile phone bills are analysed. If any irregularity or payment problem shows up, this can prevent you from getting the loan.

That’s why it’s a good idea to check your credit rating yourself before you apply for credit. You might find an issue with a phone bill or credit card payment for example. If you take care of it, with a payday loan if need be, you won’t ruin your chances of getting the loan.

Finally, it is important to know that any application for a loan you make, will stay on your record for 12 months. So if you would get an application rejected because of a silly payment issue over a phone bill, it could actually prevent you from getting a loan for an entire year, because a lender will wonder why another lender rejected your request.

Therefore, make sure you always check your rating with the above three companies before you apply for a credit. Don’t put in your credit application until you resolve any issues you might find, which in a pinch can always be done with a payday loan.