Will Bad Credit Keep Me From Getting a Payday Loan?
Will Bad Credit Keep Me From Getting a Payday Loan?
Will having bad credit prevent me from being approved for a payday loan? This is one of the most commonly asked questions when it comes to getting payday loans. The good news is that your credit rating and credit score are not even taken into account when you go to apply for any payday loan. While it is true that almost any other lender will check your credit report and credit score as part of the approval process, payday loan lenders do not do this.
What Do They Check On Then If Not My Credit Report?
There are only a couple of things that these lenders do check on when they are deciding whether or not to approve your payday loan application: that you have an open and active checking account and that you are gainfully employed. The reason that they do not check your credit report is that they do not care about whether your credit is good or bad. The only things that they want to see are that you have an open and active checking account and that you are getting paid for some type of work regularly.
What Does A Checking Account Have to Do with This?
The reason that these lenders want to need to know that you have an open and active checking account is so that they have a place to put the payday loan once approval is given… and how they will also get their money back when it is time to repay these payday loans. They will ask you for a voided check from your checking account so that they have the account and routing numbers to send your money to your checking account and also to start debiting your account when the time comes in 14 or 15 days to repay the amount that you borrowed. This is why your credit report and rating are of no concern to a payday loan lender. They only want to deal with the here and now and not with what you did or did not pay in the past.
Won’t a Default Make Bad Credit Even Worse?
Yes, it will… and this is part of why these payday loans are becoming more and more popular. Borrowers can get these payday loans regardless of their credit standing… which makes an already bad situation even worse by adding more outstanding debt to what is already there to begin with. The lenders do not care about whether you have good or bad credit because they do not have to deal with the financial repercussions of a default like the borrower does. This is the main reason that it would be wiser to avoid taking out a payday loan if you can. If your credit is good, then you really do not need one of these lenders. It is those with less-than-perfect credit who go after a payday loan and often will end up in deeper debt.