The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Information on this website may not be current. This website may contain links to other third-party websites. Such links are only for the convenience of the reader, user or browser; we do not recommend or endorse the contents of any third-party sites. Readers of this website should contact their attorney, accountant or credit counselor to obtain advice with respect to their particular situation. No reader, user, or browser of this site should act or not act on the basis of information on this site. Always seek personal legal, financial or credit advice for your relevant jurisdiction. Only your individual attorney or advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, contributors, contributing firms, or their respective employers.
Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.
If you don’t have credit or are saddled with a bad credit score, it can be nearly impossible to find financing. Payday loans — that is, short-term, high-cost loans that give cash-strapped consumers money they need — are often considered an exception to the rule. And if you’re thinking of applying for one, you won’t have to worry about your subpar (or nonexistent) credit.
“The typical payday loan borrower has a relatively small financial footprint and limited credit history, and a traditional score is not necessarily an indication of their ability to repay the loan,” Amy Cantu, a spokesperson for the Community Financial Services Association of America, an organization that represents the small dollar, short-term lending or payday advance industry, said via email.
That’s not to say payday lenders don’t perform any type of underwriting or credit check. While these companies don’t typically pull a copy of your traditional credit report from one of the three major credit bureaus — Experian, Equifax and TransUnion — many screen applicants, often via speciality subprime credit bureaus, such as Clarity Services, Teletrak and Microbilt.
“Companies in this sector look at a borrower’s gross monthly income, or GMI, length of time with a bank account and employment while also acquiring information about a borrower’s expenses and credit history from alternative bureaus and state databases,” Cantu wrote. “They then make a determination about a borrower’s ability to repay and the potential loan amount.”
You can find a list of specialty subprime credit bureaus, along with other alternative credit reporting agencies, on the Consumer Financial Protection Bureau’s website. The CFPB also lists information to request a free copy of your credit report, should you wish to review it.
Remember, just because you can get a loan with bad or no credit doesn’t mean that you should. As we’ve mentioned before, payday loans generally tout high interest rates and fees since these loans are considered high-risk), so you may want to consider other alternatives before signing up.
If a payday loan seems like your only option, it’s a good idea to work on improving your traditional credit scores so you can secure more affordable financing in the future. (You can see where your credit currently stands by viewing your two free credit scores, updated every 14 days, on Credit.com.) In general, you can fix your credit by disputing any errors on your credit report, identifying credit score killers and coming up with a game plan to address those issues.
Image: Jupiterimages
March 8, 2021
Personal Loans
April 8, 2020
Personal Loans