One of the big attractions of home credit is the open lending criteria set by the lenders making these small cash loans accessible to a vastly wider market than the banks or so called high street institutions are prepared to service – does this mean that with doorstep loans no credit checks are required?
You’ve only got to read the adverts to see that homeowners, tenants, those working full time, part time, retired or even on benefits will be considered equally and, that’s not all, the applicant is not even required to have an unblemished credit history – poor credit, bad credit, arrears, defaults, previous credit problems, County Court Judgements (CCJs) – none of these need prevent the acceptance of an application for a doorstep loan.
Many doorstep loans lenders may imply that their loans as no credit check doorstep loans but are they really that accessible, surely some form of credit check is required?
Most home credit providers will reserve the right to check an applicant for credit reference purposes and will access records held relating to the applicant by one of the three main credit reference agencies in the UK. This information is particularly important to verify identity and the lenders will do this to help protect against from identity theft and fraud, and also to prevent and detect crime and money laundering.
The information provided at initial application stage will therefore be checked against records and the electoral register and scoring methods may be adopted for the purpose of proving identity. If identity is in doubt the loan will not be approved and if false of inaccurate information is provided any lender is obliged to inform the fraud prevention agencies. Law enforcement agencies may access this information … and use it!
Initial application for a doorstep loan is very often online and if you search out the small-print it will usually constitute an agreement for the information supplied on the application form for credit assessment which may include credit scoring. It will also permit the potential lender to make any financial enquiries they deem necessary and to search the files of any of the credit reference agencies and will warn that this will remain as a record on the file and hence could affect the ability to obtain credit elsewhere in the short term.
So there you have it – doorstep loans no credit checks … not quite!
That said, the lending criteria IS very open. For most main doorstep lenders the personal service they provide means that they will treat everyone as individuals and, whilst they will look a credit file, will base any decision on a loan on the applicants current circumstances and ability to repay the loan moving forwards and will not simply make a decision based on credit history.
So, when they say things like CCJs no problems, bad credit history considered, applications accepted even if you’ve been turned down before, retired, unemployed or on benefits welcome to apply they do mean it. You credit file will be accessed but any decision will not just be based on the information found. They recognise that a bad credit history doesn’t always mean future credit problems.