05 May 2021 / by Jon Edward / in Cards and Loans, Credit Rating / Credit Score / Credit History
Why Applying for a Bad Credit Loan Directly With Lenders May Not Be The Best Move
The ‘bad credit loans’ market has many lenders most people have not even heard of; it’s therefore very difficult to know which ones are good and which are not!
Also, in these uncertain times, many established lenders such as Amigo Loans have greatly reduced their lending, so applying for a loan directly with them can be a waste of time because they are not really lending to anyone!
We discuss why going through a regulated credit broker such as guarantorloansuk.net can save you a great deal of time finding quality lenders that are actually lending!
How to find quality lenders yourself?
It’s easy to find lenders, just type “bad credit loans” or “guarantor loans” into Google.co.uk and you’ll see plenty of lenders/brokers/loan comparison websites; this research however does not tell you if these are quality companies.
Three ways that you can find this out are:
1. Check FCA Register – all lenders and brokers today in the UK are regulated by the Financial Conduct Authority (FCA), so Step 1 should always be to ensure check any lender or broker you are thinking of using is on the FCA Register. Please note that you should be able to find your lender/broker’s company name and FCA number in their website’s footer.
2. Check ICO Register – all lenders and brokers should also be registered by the Information Commissioners Office (ICO) as part of their data protection obligations, so you should also check a company is included on this (details should also be included in the lender/broker’s website footer).
3. Online reviews – whilst we all know you cannot trust all online reviews, if a particular company has 10,000 reviews giving them a 1 out of 10 average rating, you know this is a company to avoid! Just search for “lender name + reviews” to find their online reviews.
This can however be a long-winded process, and the information many lenders will not tell you is whether or not they are actively lending currently! We only work with FCA Regulated quality lenders, plus only present to you borrowing options from lenders who are looking for customers, so saving you a great deal of time.
How to find lenders that are actively lending?
This information can be hard to find, as from our experience lenders can give the appearance that they are lending, though in reality approve very few loans.
The lenders who are looking for new customers can change on a daily basis, so the way you find out on guarantorloansuk.net your borrowing options is as follows:
1. Fill out our application form – there are no credit checks at this stage, and your information will be automatically sent to over 30 lenders.
2. Shown lending options on screen – you will then be shown the borrowing options you have today on screen, and you can make your choice from there.
Typically it is through a credit broker like guarantorloansuk.net where you will only be presented with lenders that are actively looking for new customers.
Applying directly with multiple lenders can affect your credit file!
When you make an application directly to a lender they will check your credit history, but because many lenders are not granting many loans currently, you may get lumbered with unnecessary ‘credit searches’ on your file, see how this works:
1. Submit an application directly with a lender
2. They check your credit file as part of their process
3. You are rejected simply because they are reducing the loans they are approving (no fault of yours)
4. You get lumbered with an unnecessary ‘credit search’ on your file
Too many ‘credit searches’ on your file could reduce your credit score, and further impact your ability to get a loan. For more information see: How to increase chances of successful credit applications?
Surely a better solution would be to only apply to those lenders who are actiively looking for new cusomers?
Applying through a Credit Broker can reduce multiple ‘searches’ on your credit file
Applying through a Credit Broker (like us) can be beneficial, as you’ll only be presented with lenders who are lending.
So, by the time you get to being credit searched by the lenders, they will have already pre-approved your application. Whilst this does not guarantee that you’ll be accepted, it does mean that the chances of multiple credit searches will be much lower.
Please note that this only applies for a dynamic credit loans broker like ourselves who actively tries to match you with an active lender, which is not the case for manyvery high profile ‘loan comparison’ websites out there.
Hopefully, the market will recover soon and more lenders will start lending again, though in the meantime, you can save yourself a great deal of time, and potential searches on your credit file by going through a credit broker like us 👍.
Happily married with two wonderful girls. Love cycling, curry, and when I get the chance - loud music! See Jon's Profile Page