Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk. We are a broker, NOT a lender.
Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk. We are a broker, NOT a lender.
When you're looking for a personal loan, it might seem like there are two main routes: applying with a lender directly or working with a credit broker. But what exactly is a credit broker, and how do they fit into the loan application journey?
In this guide, we’ll explain everything you need to know about credit brokers in the UK – including how they work, how they differ from lenders, and how to tell if a broker is reputable and FCA-authorised.
A credit broker is a business or individual that helps people find and apply for credit products – such as personal loans, car finance, or credit cards – by matching them with suitable lenders. Credit brokers don’t lend money themselves; instead, they facilitate access to lenders who do.
Think of a credit broker as the matchmaker in your borrowing journey. They assess your needs, your financial situation, and your creditworthiness to find the best-fitting loan product available on the market.
No – and this is an important distinction.
Credit broker vs lender:
Result Loans, for example, is a fully regulated credit broker – not a lender – which means we work with a network of lenders to help you find a loan offer that’s right for your situation.
Here's a step-by-step look at how a typical UK credit broker operates:
You’ll start by filling out a short form with some basic information:
This initial form does not usually trigger a hard credit check – most reputable brokers use a soft search tool.
To assess your eligibility, the broker will run a soft credit search, which doesn’t impact your credit score. This gives them access to your credit profile so they can identify lenders likely to approve your application.
Using your details and credit profile, the broker searches their panel of lenders and matches you with loan options you may qualify for. Some brokers offer instant decisions or a shortlist of multiple lenders.
Once you've reviewed your loan offers, you can select the one that best suits your needs. At this stage, you’ll usually be taken to the lender’s site to complete the application. This is when a hard credit search may occur.
The lender will verify your income, credit history, and affordability. If approved, the funds are paid directly to your bank account.
There are several benefits to using a credit broker – especially if you want to improve your chances of loan approval or find the most competitive rates.
Rather than applying to multiple lenders separately (which could damage your credit score), a broker lets you compare offers in one place with one soft search.
Many brokers work with specialist lenders that you might not find on comparison websites. These lenders may be more willing to consider applicants with bad credit or non-standard incomes.
Brokers often use technology to automatically assess your profile and match you with lenders whose criteria you meet – saving you the guesswork.
Yes – in the UK, credit brokers must be regulated by the Financial Conduct Authority (FCA). This ensures they follow responsible practices and are transparent about fees and commissions.
Result Loans is regulated by the FCA and is committed to treating customers fairly. We never charge upfront fees and always disclose how we work.
Many credit brokers offer their services for free to the customer. Instead, they earn a commission from the lender when a loan is successfully funded.
However, some brokers charge fees, especially in the debt advice or guarantor loan space. Always read the terms and conditions carefully.
While the majority of brokers in the UK are reputable, there are a few warning signs to watch for:
🚩 Asking for payment upfront
🚩 Offering guaranteed approval
🚩 Being vague about who the lenders are
🚩 Not showing an FCA registration number
If something feels off, check their details on the FCA Register.
Using a credit broker can be a smart way to find better loan deals, improve your chances of approval, and avoid unnecessary hits to your credit file. Just be sure to use an FCA-regulated broker like Result Loans and always read the fine print.
By understanding how credit brokers work, you can make a more informed and confident decision about borrowing money.ltation concept
