Payday loans are short term loans that are great for emergency situations. They can provide up to $ 1,000 in one business day for those times when you need cash quickly. If you are looking to get a payday loan, you will probably want to know if they are checking your credit history. In addition, you need to know what other requirements Payday loans have so that you can acquire one quickly and easily when needed. You can find all of this information in this article.
Credit Checks For Payday Loans
Payday lenders usually perform some sort of credit check even if they advertise that they don’t. However, this is often a soft credit check. This means that the credit check will not count as an investigation on your credit report. The payday loan itself will also not appear on your basic credit report. Neither the credit check nor the loan will affect your credit score as long as you pay off the loan by the agreed due date.
Each lender has specific underwriting criteria that you must meet to be eligible for the loan. Your credit history is only one factor, and for payday loans, it is not the most important factor. Among most payday lenders, the most important factor is that you can pay off the loan in a month. To determine this, lenders will ask for proof of income such as a pay stub.
Here is the full list of requirements for getting a payday loan:
Getting a payday loan with less than perfect credit
It can be difficult to get an installment loan or a credit card with a low credit score. If you are approved for any of these long term options, you could have a high interest rate. With a payday loan, a low credit score won’t necessarily prevent you from getting approved or incurring higher loan fees.
Payday lenders check your credit history to help them get an overall picture of your ability to repay your loan. Every lender is different, and credit history may be a more important factor for some lenders, while others may not consider it at all.
If your credit is downright poor, or you’ve been recently turned down for a payday loan, consider applying for a loan through a matchmaking service such as GreenStarCash. With a matchmaking service, your credit history is only checked once, but the service sends your loan application to multiple lenders to increase the likelihood of the loan being approved. These matching sites usually have access to hundreds of lenders, and they will choose the best ones for your situation.
Credit Score Required For Payday Loans
Knowing your credit score before applying for a payday loan can give you an idea of your approval. You can check your credit for free at CreditKarma.
No specific credit score is required to get a payday loan, but there are general ratings for each score. The table below explains how each rating is perceived by lenders:
|Goal||Rating||Loan approval odds|
|Less than 580||Poor||Unlikely to be approved for large loans, but may be approved for a payday loan|
|580 – 670||Fair||Likely to be approved for a payday loan|
|670 – 740||Good||Likely to be approved for short and long term loans|
|Above 740||Excellent||Better chances of approval with the lowest interest rates|
How Payday Loans Affect Your Credit Report
Since payday lenders perform flexible credit checks rather than strict credit checks, the loan will not appear on your standard credit report. However, if you are applying for a large loan like a mortgage, lenders may see short-term loans, including payday loans, in your credit history. Some mortgage underwriters may be more reluctant to approve loans for people who have payday loans on their credit history in the past year.
If you cannot repay the loan in full by the deadline which is usually two weeks to one month from the day the loan was granted, you may be able to extend it for an additional fee. Be sure to speak to your lender as soon as possible if you are unable to repay the loan before the deadline. Otherwise, the lender may report it to a debt collector, which could affect your credit rating and your ability to take out a loan in the future. Having a debt sent for collection can impact your credit report up to seven years.
Payday lenders check your credit history using a soft credit check, but your credit score is not a big factor in the decision to approve your loan. As long as you can provide a paycheck stub or other document to prove your ability to repay the loan on time, you have a good chance of getting approved. So, don’t let a bad credit score keep you from applying for a payday loan if you need the cash urgently.