Can I check if I have a bad credit rating before applying for a loan?

Can I check if I have a bad credit rating before applying for a loan?

Yes, you can check if you have a bad credit rating before looking for a loan.

Not only are you able to look at your credit score before you apply to borrow money, it’s actually a good idea because your credit rating will affect your chances of getting the loan you’re looking at.

What is a credit score?

Your credit score is a number that lenders like credit card, loan and mortgage companies look at to use as part of their decision process of whether or not to lend you money.

People with a high score are generally considered by lenders to be a lower risk, and so are more likely to get credit. If your score is low it means you are more likely to be considered a higher risk and so may find it more difficult to credit.  If you have missed payments on previous borrowing you are likely to have a lower score.

What is a credit report?

Your credit report shows your history of borrowing money – if you’ve ever had things like a credit card or a loan before, and how well you’ve kept up with the repayment terms.

When you’re applying for a loan, it’s recommended that you check your credit report first. This is important since applying for credit from lots of different lenders and being declined for credit can lower your score.  Checking first may help give you an idea of your chances of being approved for a loan before you apply and help you choose a product or lender that you are more likely to be approved by.

Good credit ratings

Having a good credit rating usually means you have a high credit score. You can improve your credit score by ensuring you pay any necessary repayments on credit cards and loans within the time frame agreed with the lender. This signals to a lender that you’re reliable and so may be less of a risk to them if they lend money to you.

Bad credit ratings

Having a bad credit rating usually means you have a low credit score. You may have a low credit score because you have borrowed money previously, through a loan or credit card for example, and not managed to keep up with repayments. If you have a bad credit rating, lenders will consider you more risky to lend to, but it doesn’t necessarily mean you can’t get a bad credit loan.

Insufficient credit history

Having no credit rating, or insufficient credit history, means there’s not enough borrowing history on your record. This could be because you are young and never had credit before or because you have recently moved from another country and not used any credit in the UK.

This doesn’t mean you have a bad credit rating, it just means there’s no real evidence to say whether you can keep up with repayments and it can still make it hard to get a loan.

How to check your credit rating

There are three main companies in the UK that compile credit reports where you can find your credit score. These are:

  • Equifax (
  • Experian (
  • CallCredit (

Each one offers access to your report. All are obliged to provide you with a copy of your report for a nominal fee of £2. It’s called a statutory credit report and you can receive it online or through the post, whichever you prefer.

All three agencies also offer membership services which allow you to check your report online whenever you wish to. Each membership service provides different benefits and has a different cost. If you would like more information on these services we suggest visiting each of the agencies websites listed above for more information.

Each credit reference agency may hold slightly different data on you. The agencies compile their reports based on information that’s sent to them from lenders, and not every agency will receive information from the same companies. Therefore, if you want to be really thorough, you might want to consider getting a copy of your credit report from each agency.

How to read your credit report

A typical report will show all your credit accounts, which means things like credit cards and loans, and it’ll display whether you have made repayments on time, if they’ve been late, or if you’ve not repaid the money at all. It’ll also have:

  • Your name and date of birth.
  • Whether you’re on the electoral register.
  • Your current address, along with any previous residences.
  • The details of anyone who you have joint credit with – for example, someone you’ve been named on the tenancy for a rental property with.
  • Public record information such as any house repossessions, bankruptcies, or a County Court Judgement (CCJ) – these stay on your record for six years.
  • Who your current bank account provider is.
  • Information on fraudulent activities, committed by you or someone else, using your identity.
  • How to tell if you have a bad credit rating

When looking at your credit file, if there are any missed or late payments stated, it’s an indication that you may have a bad credit score. Bankruptcies, insolvencies and CCJs will also have a negative impact and will stay on your report for at least six years.

Assessing your options

Even if you have a bad credit rating it doesn’t necessarily mean that you can’t get a loan. Some lenders will consider all loan applications, no matter your financial position and most will carry out an affordability assessment which will look at your income and outgoings to see how much you can comfortably afford to borrow. If the lender is satisfied that you can manage the repayments and the loan is right for your needs, they will lend you the money.

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