Guarantor Loans are commonly advertised as being no credit check loans with FLM Loans for example using the headline “Unsecured loans for up to £3000 with no credit check”. This itself is misleading since a credit check is in fact carried out, but it is stated that this is used for verification only. They state within their FAQ that the check is to make sure that the applicant is not currently bankrupt or on an IVA (they do accept those discharged from bankruptcy). FLM go on to point out that the only credit check that counts is the one made on the guarantor who will be required to have a good credit history. A footprint of the search will be left for the applicant and guarantor showing that the search did take place, but the only search that is scored is the one for the guarantor. If a guarantor loan is funded then the future activity of the loan will be made on the credit profile of the applicant, which will allow this applicant to rebuild their previously damaged credit profile. With the addressed points, the credit check isn’t anything to be concerned with, but yes that “no credit check” headline used in promotion is certainly misleading.
Tags: guarantor loans