Most people asking this question have already had a bad experience somewhere else. They’ve been turned down by their bank, or by a comparison site, or by one of those instant-decision lenders that promises a yes and then quietly delivers a no. They’re not sure whether to keep trying.
The short answer
Sometimes, yes. Sometimes, no. It depends less on your credit score itself and more on what we can see is actually happening in your life right now.
We’re a credit union, which means we’re owned by our members and the money we lend comes from other members’ savings. That makes us careful lenders, but it also means we can sometimes look at applications a bank wouldn’t. Every application is reviewed by a real person who looks at your full situation, not just a number from a credit reference agency.
That doesn’t mean we say yes to everyone. There are some situations where we can’t help, and it’s better to say so up front.
When we can’t approve a loan
There are a few situations where we won’t be able to lend, no matter what else is in your application:
- You’re currently bankrupt
- You have an active Individual Voluntary Arrangement (IVA) or Debt Relief Order (DRO) — both formal agreements with creditors to pay off debts you can’t manage
- You have unsatisfied County Court Judgments (CCJs) on your file — court orders to pay a debt that you haven’t paid yet
These aren’t judgements about you. They’re situations where taking on more debt isn’t going to help, and where the right next step is usually free debt advice rather than another loan application. If that’s where you are, MoneyHelper, StepChange, Citizens Advice and National Debtline all offer free, confidential help. They’ll talk you through options a lender wouldn’t.
If none of that applies to you, keep reading.
What matters more than your credit score
Picture two members applying for the same £3,000 loan. Both have less-than-perfect credit scores.
The first has a CCJ from eighteen months ago that’s still unpaid, three credit cards close to their limits, and a bank account that’s gone overdrawn in two of the last three months. We probably can’t help, because the loan would be hard to afford and things aren’t steady right now.
The second has a CCJ from four years ago for an old council tax bill which has since been paid off, a couple of missed credit card payments from around the same time, and three months of bank statements showing rent paid on time, bills covered, and a small amount left over each month. Same credit score, very different application. The second member is much more likely to be approved.
The difference isn’t the score. It’s where things are heading.
What we’re trying to work out is three things. Can you afford the repayments without it tipping you into difficulty? Are you on top of things now? And if there were problems in the past, are they clearly behind you? If the answer to all three is yes, a few historic marks on your file are much less likely to stand in the way.
How we use Open Banking to assess affordability
Most lenders run your application through an automated system. A computer reads your credit file, scores it using a set formula, and gives an answer in seconds. It’s part of why getting a loan with bad credit can be harder than it needs to be — the system can’t see the full picture.
We use Open Banking instead. With your permission, you give us secure, look-only access to your recent bank transactions. An underwriter then looks at what’s actually happening: income coming in, rent or mortgage going out, bills, existing credit, what’s left at the end of the month. It takes longer than an instant decision, but it gives us a much better picture of whether a loan is genuinely affordable. If Open Banking isn’t an option for you, you can send us recent statements instead.
Your credit score is part of the picture, but it’s a summary of the past. Open Banking shows us how you’re managing money today, which usually tells us more.
What it means if you’ve been turned down elsewhere
Being declined by a high-street bank doesn’t always mean much. Their systems are designed to find applications they see as low risk and reject anything that doesn’t tick all their boxes, including plenty of people who could comfortably afford a loan. We see this all the time.
But it can also mean something real. If you’ve been turned down recently and you’re in any of the situations under “When we can’t approve a loan” above, we won’t be able to help either. Our initial check is a soft search, which won’t leave a record on your file that other lenders can see, but it’s still worth being honest with yourself about why a previous lender said no before applying somewhere new. If the reason is something that won’t change any time soon, another application probably won’t get a different answer.
If your situation looks more like the second member in the example above, applying with us is more likely to be worthwhile. We’ll assess your case on its merits, and we’ll tell you honestly if we can’t help.
How to improve your chances of getting a loan
Whether you apply to us or somewhere else, some of this is just useful to know.
- Check your credit file for errors. All three agencies (Experian, Equifax, TransUnion) let you check for free, and errors are more common than you’d think — an old account showing as open when it isn’t, a missed payment that wasn’t actually missed, an address that doesn’t match. Get them corrected.
- Pay off any unpaid CCJs if you possibly can. A CCJ stays on your file for six years from the date the court made the order, but once it’s paid it’s marked as “satisfied”, and most lenders (us included) treat a satisfied CCJ very differently from an unpaid one. Clearing it is one of the most useful things you can do.
- Get on the electoral roll if you aren’t already. Lenders use it to confirm who you are and where you live, and not being on it slows everything down.
- Avoid making lots of applications close together. Most lenders run a hard search when you formally apply (which leaves a record on your file), and a lot of these in a short space of time looks, from any lender’s point of view, like financial stress. If you’re going to apply, apply once, somewhere you’ve thought about properly.
- Borrow only what you need. A smaller loan is easier to afford and easier to approve, and you’ll pay less interest over the term.
- Wait, if you can. Most negative entries drop off your credit file after six years. If you’re close to that anyway, a few months of patience will do more for your application than another form will.
Alternatives to borrowing
If money is tight and your credit file is in poor shape, more borrowing isn’t always the right answer.
Free debt advice is the right starting point if you’re already struggling with existing debt. Building up some savings, even a small amount, often does more for your finances over time than a loan does. And if you’re behind on something specific, talking to that company directly is usually more productive than people expect — most will agree to a manageable payment plan if you ask.
If your circumstances are stable, the problems are behind you, and the loan you need is one you can genuinely afford, it makes sense to consider whether a loan with us is right for you, and to apply if it is. We’ll look at your full picture, we’ll be straight with you about whether we can help, and either way you’ll get a real answer from a real person.
