You Will Not Need Your Credit Score With A Payday Loan

Good credit is important, for anything you need to buy; especially a house. Did you know that there is a no credit loan that anyone can be granted? This is a short term loan called a payday loan.

It seems that these days you need credit for everything; homeowners insurance, getting any type of loan or credit card, and even securing a job. Credit scores are used to determine how much of a loan you can receive or if you can receive any loan at all. Also, your credit score is used to determine the rate of interest that will be applied to the loan. The better your credit score, the lower your interest rate.

There are three score reporting companies; Equifax, Experian and Trans Union. However, the most important credit score is the FICO (Fair Isaac Company). The FICO developed the mathematical equation for determining your credit score. That score can range anywhere from 300 to 950. The higher the number, the better your credit is and the lower the consumers loan default risk. Banks, credit unions and lenders altogether run your score to see how much of a credit risk you are. This, of course, makes it tough for those of us who are looking to borrow money but don't have a very good credit score. For a payday loan you need not worry about these scores. A payday loan is a no hassle, no credit short term loan that carries a high interest rate. Comparatively to the national credit percentage, however, the borrower does end up paying more in the long run because the duration of this type loan is short. Your FICO score will have no bearing on the payday loan you apply for.

There are actually very few requirements necessary in order to get a payday loan or cash advance. The borrower needs to be eighteen years of age, be employed with proof of income via a bank statement and not have a considerable amount of other payday loans out. There will be no credit check. In fact, if the borrower keeps up with the repayment dates, their credit score may actually improve.

FICO scores are important, but did you also know that the score that the consumer sees when they order their credit report is actually different than the credit score that the lender views. This can harm the consumer is many ways because the consumer will waste time in applying for a loan that he cannot get due to his/her credit score. Also, the lender will charge them a higher interest rate than they were expecting and the borrower will accept it.