You might have heard of guarantor loans that require no credit check at all. That may seem tempting if you or the guarantor have bad credit, but you do need to be careful of these kinds of loans.

Why “No Credit Check” Loans Can Be Risky
Oftentimes, if the lender is advertising no credit checks for their loans, then there is a chance that you are going to have to pay an extra fee for the privilege of skipping the credit check. This allows the lender to recoup some costs they may lose if you or your guarantor fail to repay the loan in time. If you are serious about going with a “no credit check” loan of any kind, be sure to check all the fees to ensure that the cost is comparable or better than the cost for a loan with credit checks involved.
You also have to be careful about the lender passing on your information to third parties. If the lender isn’t interested in requiring a credit check, then they may not be very scrupulous in other matters. Not asking for a credit check is not a sure sign that the lender is trying to scam you, but it goes against standard industry practice, and it needs to be approached warily.

Why Credit Checks Are Important
Nobody likes having their credit checked, particularly if they know they have some marks against them. There is the mistaken belief that having a credit check performed actually lowers your credit rating, but that’s not true with a routine check like this. It doesn’t register as anything that would hurt your credit. Certain kinds of credit checks can hurt your rating, but not the typical checks run by lenders as they examine your ability to repay a loan.

Having your credit checked ensures that you have financial accountability and gives the lender peace of mind. It allows them to operate with lower risk, and this keep their prices low to reflect that decreased risk. They don’t have to worry quite as much if you pass a credit check.

It also ensures that people who would not be able to repay a loan are being denied approval for such loans. That may not seem like a good point to someone who was turned down for a loan, but being denied keeps them safe from further financial disaster. Your credit history is a reflection of your financial practices. If you haven’t been very smart with your money, then it may not be a good idea to take out a loan. Credit checks ensure the people with the worst money problems don’t fall further into debt.

Finding a “No Credit Check” Loan
It’s definitely possible to get a guarantor loan that doesn’t require a credit check, but you do need to take certain precautions. Be sure to look at the full cost of the loan and the terms too. Make sure that you aren’t being charged unreasonable prices for the ability to skip the credit check part of the process.

It’s also a good idea to look into the lender and see if they check out as a reputable financial institution. You can read user reviews and any news stories that involve them to make this determination.
While you can certainly get a no credit check loan, if that is your wish, then you’ll be able to, with some looking. Just use common sense and make sure you aren’t getting in over your head with a loan that you are going to struggle to pay back on time.