Do Payday Loans Check Your Credit?
Your credit rating or score is the measure of how risky it would be to lend you money, or in another sense, how well you have managed your credit in the past. It accounts for whether you’ve made payments on time or missed them, whether you’ve paid off debts in utter or defaulted, and how many different forms of credit you have at any given time.
While there is no universal credit rating, several different credit rating bureaus make their own calculations and lenders use these to make up their own mind about whether to lend to you or not. The will also pass on your information to the bureaus to add to the credit report.
If you have a bad credit rating the last thing you might consider is taking out a loan, however many payday loan lenders promote that they do not check your credit rating at all. Is this actually true?
The brief reaction is yes! In the vast majority of cases payday loan lenders will not check your credit history as part of the application process. This makes it the ideal option for those that need emergency cash but would be rejected by banks and other financial institutions. What makes payday loans especially useful is that they can also issue the cash within 24 hours, making them a fine resource in an emergency, whereas traditional banks loans can take may days going through paperwork and other procedures.
What Payday Lenders Are Primarily Interested In Is Your Income.
Because payday loans are a brief term commitment (usually no longer than a month) all they want to know is that you have a pay check coming in the next few weeks that can meet the repayment amount (the principal plus finance charge). How much you earn is a key factor in how much you will be permitted to borrow, and some states regulate that you can only borrow a certain percentage of your gross monthly income anyway. Therefore your credit rating is not that significant.
Generally all that is required to take out a payday loan is that you are over Legal years old, have a stationary address, have a regular source of income, and a checking account that accepts deposits and debits. This can all be entered online and you should be approved almost right away.
There are of course exceptions to this rule, tho’ they are very uncommon. If the information you’ve entered on your application doesn’t check out or there are irregularities, payday lenders may lookup your credit report as a way of verifying your identity and to check whether there is any history of fraud. For example, if you’ve lied on applications before and your application doesn’t seem to check out, and then they find you’ve lied before you may be rejected.
Also if your application is borderline for being accepted or rejected, they may take a look at your credit report to help them make the final decision. This is very likely only the case if you do not have adequate income. It is very infrequent for an application to be borderline to begin with.
What Credit Bureaus Do Payday Lenders Use?
If you are one of the uncommon applicants that have their credit history checked, they will use the leading credit rating bureaus such as Equifax, Experian or Trans Union. Interestingly however when they report about their own dealings with you it is often to the smaller bureaus, so any influence the loan itself might have on your credit rating is not always factored in when taking out other forms of credit in the future.
The average payday loan borrower will not have to worry about credit checks on their application and should be approved within minutes if they meet all of the standard requirements.
Note To Consumer: If you are presently fighting with debt you are advised to obtain accomplished financial guidance. Taking out a short-term loan will not solve your long term debt problems. Short-term loans are governed by local laws and regulations, which borrowers are encouraged to review before proceeding.
APR Disclosure: The Annual Percentage Rate (APR) is the interest rate charged by the lender, based on the amount loaned, cost and duration of the loan, number of repayments, and timing of repayments. This rate and other terms will be introduced to you in a loan agreement prior to signing the contract, as per federal law. The maximum APR that lenders can charge for loans varies from state to state. On average the rate will fall inbetween 200% and 1386% for cash advance loans, and 6.63% to 225% for installment loans. Some states have no regulations regarding APRs and therefore the lender can charge any rate they desire. A lender reserves the right to switch their APR at any time, within state regulations.
Exclusions: Due to state laws and regulations residents of West Virginia, Arkansas, Vermont and Fresh York are not permitted to use our service or website. Furthermore not all short-term and small-dollar loans are legally available in all states. We reserve the right to switch the states serviced by this website without notice.
Credit Implications: No credit decisions are carried out by our service or website. Credit checks may be carried out by an independent lender from our network if you have been referred to them, which may include reports from credit bureaus or alternative providers. This may be used to assess your current credit standing or capacity, and overall credit worthiness as deemed by the lender. By submitting your information via our loan request form you accept that such checks will take place and agree to permit lenders to verify your individual details. Taking out a short-term loan will not solve your long term debt problems, and all loans provided by the lenders in our network are intended to be repaid over a brief period of time. It is wise to obtain professional guidance regarding your current financial situation, and the risks involved with short-term loans. If you cannot realistically repay the loan at the time of your next pay period, then you should seek a smaller amount or not use this service. Missing payments or failing to repay loans at all, may result in added fees and interest, and collection proceedings by the lender to attempt and recover the debt. Policies regarding loan renewals and collections vary from lender to lender, so make sure to read their total terms before committing to a loan.