Will a credit check lower my credit rating?

credit rating

One of the problems when applying for payday loans in the UK in the past has been how this process can negatively affect your credit rating. If you applied for a loan and were rejected, your credit rating may fall as a result. This leads to a negative cycle where the more money you ask for, the harder it is to actually get it. This caused many people to damage their credit rating and ultimately prevented them from even applying for loans they desperately needed.

When you initially apply for a payday loan, something called a soft search is performed. Soft search has no effect on your credit rating. If you are approved and agree to take out a loan, then lenders are required by the FCA (Financial Conduct Authority) to perform a hard (full) loan search. By this point, you have already been accepted based on a soft search, so it is much more likely that you will be issued a loan and this will not create problems.

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