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Yes, you’ll need a credit check for a payday loan and we’ll tell you how it works. We’ll also tell you what’s included in your credit report (did you know you had one?) and what it could mean for loan approval. So, it’s time to ask… Do I Need A Credit Check for a Payday Loan? Yes and we’ll fill you about it in now!

Key Factors:

  • Credit checks are usually done automatically by lenders when you request a loan 
  • Lenders use credit checks to see if you can afford to repay the loan you’re requesting
  • When credit checks are done they show your credit rating and your repayment history
  • There are bad credit loans and no credit check loans if your credit rating is too low. 


Will I need to arrange my own credit check?

When applying for a payday loan you don’t need to request your own credit check. Your lender will do it automatically. Credit checks are part of almost all loan processes. It’s a financial check to see your financial situation. It’s essential to the loan request process. It gives the lenders the information they need to see if you’ll be able to pay back the loan when the time comes. 

The credit check helps a company or lender see your circumstances and your financial history. A lender can base their decision on whether or not to offer a loan to you based on what they discover in your credit check. 

Credit Checks Have Many Purposes Not Just for Payday Loans

These checks can also be used for many other things, not just for loans. Say you want to rent an apartment or you want to get an insurance policy, credit checks are used then. Even when buying a new phone or when you go for a new job. 

A credit check rightfully (or in some cases wrongly) tells the potential company what kind of risk you’d be – good or bad. It helps them decide if they want to be in business with you. Are you creditworthy? Is it worth their time and money? Is a financial commitment with you smart? 

So, credit checks are carried out when you ask for all but a few loans. When you go for a loan like a payday loan, the lender asks if it’s okay to look at your financial information. They get to see your transactions and from what they can glean in your financial history. They can tell based on their experience and your numbers, whether you can afford the loan.


Will My Credit Check Show Updated Information?

You don’t need to provide any information because it’s already stored. Whether you know it or not you already have a credit score. There are companies (3 in the U.S.) who automatically track your credit history and keep it up to date – to the minute. 

The higher the score, the better the chances are that a lender will look at you as lend-worthy. Most have a score, a number, or a threshold at which they’re willing to offer a loan. So once the lender has your financial information from the credit check, they can move forward. 


What Shows in my Credit History

There can be a lot of financial information in your credit history. Any credit card you’ve held. It shows your repayment history. If you have a mortgage, it shows the start date and the amount of that loan. Your records also include accounts that you’ve had in the last six years even the ones you’ve closed. As well as joint accounts, current accounts, and any overdrafts. 

Certain loan requests will show in your credit check. You don’t have to worry about that with payday loans. There is no footprint left in your record if you’ve applied. 

Repayment history is a big one. Have you missed repayments or defaulted on a loan? If you’ve declared bankruptcy or had a CCJ (County Court Judgement for debt) that will be there too. 

The credit check will also hold information if your identity has ever been used for fraud. There are things you can do to improve your credit score.


How About if I Have No Credit History?

If you’re a newbie when it comes to credit cards and loans, there may not be much to go on. It’s important to begin building a credit score as soon as possible. Get a credit card and pay off your monthly bill every month and on time. That will help build a good credit score.


Why do I have to have a credit check?

You’re not being singled out. A credit check is automatic for any loan inquiry. Everyone has to do it and it’s vital. And it’s a check. It also gives protection to a lender. If they see that you have missed loan repayments before. They can also see if you’re in debt and for how much. From that, they can decide not to lend to you and not risk losing money.


Are Credit Checks Necessary For Payday Loan?

Yes, it’s a mandatory part of any loan request process for a payday loan. And it’s automatic. Payday lenders are smart. They want and need to make informed decisions before they provide money to anyone. 


My Bank Turned Down My Loan Request – Can I Still Apply?

If you’ve been turned down by your bank, it doesn’t mean that you’ll automatically be denied. Funding Zest will look at all loan inquiries. If you have a low credit score or a poor credit record, we have lenders who work with people with a range of credit histories. 

Just remember that a credit check is a necessary and automatic part of the payday loan process. So, it makes sense to find out what your credit score is right now. That way you’re prepared before you apply.

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