Loan eligibility

If you’re considering taking out a loan, our guide will help you better understand how a lender may judge your eligibility. 

  • 1.
    What is considered when determining loan eligibility?

    Here are some of the common factors that lenders take into consideration when checking whether you’re eligible for a loan:

    • Personal details: for example, with Bank of Scotland, you must be 18 or over, a UK resident and not in full-time education.
    • Employment status: some lenders may check that you’re in paid employment or have a regular income.
    • Credit history: if you have missed credit payments in the past, been declined for credit, have had county court judgements (CCJs) or have been bankrupt, it may affect your eligibility for a loan.
    • Whether you’re an existing customer: to take out a loan with us, you must have held a Bank of Scotland current account for at least one month.
    • Details of the loan: how much you want to borrow and for how long may also impact your eligibility.

    If you’re an existing customer of Bank of Scotland, you can log in to Internet Banking to see how much you could borrow and if you’re likely to be approved.
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  • 2.
    Why is my credit score important?

    Your credit score, also known as your credit rating, is important as it measures how you’ve managed your personal finances in the past. This gives lenders a picture of whether you might meet your loan repayments in the future.

    Lenders may use this information to decide how much they are willing to lend to you and at what interest rate. A good credit score may mean you can borrow more money at a better rate.

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  • 3.
    How do I find out my credit score?

    Your credit score is based on information about you and your finances that is collected by credit reference agencies (CRAs).

    The main CRAs: TransUnion, Experian and Equifax, all collect slightly different data about you, so it’s often worth requesting a credit report from all three. You have the right to request this report at any time, it’s free of charge and will not impact your eligibility for future credit. This may help you to identify any factors which are lowering your credit score.

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  • 4.
    5 ways you can improve your credit score

    There are some actions you can take to improve your credit score and, with it, your loan eligibility.

    1. Register on the electoral roll: this will improve your credibility with lenders as they will be able to confirm your name and address. You can do this on the Gov.uk website.
    2. Manage your existing debt: if you have existing borrowing, check if you can consolidate or reduce your debt. There are free, impartial advice services available to help you achieve this, such as the Money Advice Service.
    3. Reduce your amount of applications for credit: if you apply multiple times for credit in a short space of time, this could negatively impact your credit score. Some lenders offer ‘soft’ searches which are not recorded by credit reference agencies and will not impact on your credit score. If you’re an existing customer of Bank of Scotland, you can log in to Internet Banking to see how much you could borrow and if you’re likely to be approved.
    4. Don’t miss payments: keep up with any regular payments, such as mortgages, credit cards, loans, etc. Lenders will look at how well you manage your finances. Missed payments may be seen as a sign you’re not borrowing responsibly.
    5. Consider closing unused credit and store cards. If you have access to a large amount of credit, even if you don’t use it, it could negatively impact your ability to borrow more. However, if you have any long-standing accounts with good credit history, it could be worth leaving these ones open.
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  • 5.
    Our Personal Loan eligibility

    You can apply for a Personal Loan with us if: 

    • You’ve held a Bank of Scotland Current Account for at least one month
    • You are a UK resident and aged 18 or over
    • You are in paid employment or have a regular income
    • You’re not in full time education
    • You’ve not been declined for credit in the last month
    • You don’t have a history of bad credit
    • You are not applying for any of these reasons.

    The decision to lend to you and which rate you’ll receive is based on our assessment of your personal circumstances and additional affordability checks. 

    If you’re an existing customer of Bank of Scotland, you can log in to Internet Banking to see how much you could borrow and if you’re likely to be approved.

    Find out more about our loans or use our loan calculator to find out how much you could afford to borrow.

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