When you apply, we’ll ask for your permission to pass certain details from your application on to a credit referencing agency. This process, usually referred to as a 'credit check' usually happens as soon as the application form is submitted, and is an automated process.
Why do you do credit checks?
There are two main reasons we do this:
- To allow us to check that you are who you say you are, by checking the information you've provided against public records such as the electoral roll
- To flag any issues in your credit history (such as county court judgements, bankruptcies or individual voluntary arrangements) which we will need to take into account when considering your application.
How important is my credit score to your decision?
Unlike many lenders, your credit score is just one of several factors we consider when deciding whether or not to approve your application, and so a below-average credit score doesn't automatically mean you won't be approved. We will, however, take into account things like county court judgements or IVAs which show you've had difficulties repaying credit in the past.
The other key thing we'll consider is whether or not your application is affordable, which is why you may be asked to upload copies of your payslips and bank statements when you apply.
What if my application isn't approved?
For some of our products (such as our personal loans), a record will be kept of this search on your credit file, whether your loan application with us is approved or not. Other lenders will be able to see that you have applied for credit with us, and have not been approved. They may take this information into account when making their own decision.
For our newer products (such as the Commodo card), we now do a 'soft' search, which means that there is no impact on your credit file if you are not accepted. We are in the process of upgrading all of our systems to use soft search, and expect this to be complete by the end of 2020.
What if I am approved?
If your loan application is approved, a record of the loan will be added to your credit file. This will be updated each time you make a loan repayment, so other lenders will be able to see whether you are keeping up with repayments and paying on time.
If you do stick to your loan agreement and make the agreed repayments on time, this will have a positive impact on your credit file, and may make it easier to get credit. On the other hand, if you have difficulties with repayments, this will show up on your credit file, and may make other lenders more reluctant to lend to you in future.