Many payday lenders do not perform a traditional credit check when processing a loan application, or perform a soft credit check. Instead, they typically rely on other factors such as income, employment history, and bank account activity to determine whether a borrower qualifies for a loan and how much they can borrow.
Payday loans are a type of short-term borrowing that typically carries a high interest rate and is designed to cover unexpected expenses between paychecks. For individuals who need cash quickly, payday loans can provide a solution, especially if you have bad credit.
What Is A Credit Check For A Payday Loan?
A credit check for a payday loan is a process that lenders use to determine the creditworthiness of a potential borrower before approving a loan application. Payday loans are short-term, high-interest loans that are typically granted based on the borrower’s ability to repay the loan on their next payday, so many payday loan lenders value borrowers who will be more likely to be able to pay the loan back in full.
During a credit check, the lender will review the borrower’s credit history and credit score to determine the likelihood of the borrower repaying the loan on time. This can involve obtaining a credit report from a credit reporting agency and assessing the borrower’s past credit behavior, such as how often they have made late payments or defaulted on loans.
However, not all payday lenders perform credit checks. Some may only require proof of income and a bank account to approve a loan application. These types of loans are known as no credit check payday loans. However, they often come with higher interest rates and fees, and can be more difficult to repay. It is important for borrowers to carefully consider their options and the terms of the loan before applying.
Read our guide on how credit checks work.
Am I Eligible For A Payday Loan?
Pheabs makes it easy to find a straightforward same-day loan anywhere in the US. There are only a few simple requirements to be eligible. Firstly, you must be a US resident, and you have to be at least 18 years of age. You would also need to have a consistent income with earnings at a minimum of $800 per month. Lastly, you are required to have a checking account that your payday loan can be deposited into.
You can submit an enquiry for a payday loan with Pheabs online in just a few minutes. You will need to provide some basic personal information such as your address, date of birth, and bank details to prove that you are eligible. Submit a form today to get the, and you could see the money in your account in one lump sum in just one hour!
Will My Credit Score Affect My Ability To Get A Payday Loan?
Sometimes your credit score may affect your ability to get a payday loan. Some payday lenders may consider your credit score during the loan application process, as it provides an indication of your creditworthiness and ability to repay the loan.
If you have a low credit score, it may be more difficult to get approved for a payday loan. Some lenders may reject your application outright, while others may offer you a loan with higher interest rates or stricter repayment terms.
A bad credit score does not necessarily mean you won’t receive a payday loan. Pheabs considers all credit histories, including poor credit. When you submit a form for a payday loan with Pheabs it is 100% online, completely free, and will not affect your credit score.
What Checks Do Payday Lenders Carry Out?
During the loan application process, payday lenders can carry out a number of checks to assess the borrower’s creditworthiness and ability to repay the loan. These checks may include:
- Credit checks: The lender may check the borrower’s credit history to see if they have a history of late payments, defaults or other credit problems.
- Income verification: The lender may require the borrower to provide proof of income to ensure that they have the means to repay the loan.
- Employment verification: The lender may verify the borrower’s employment status to ensure that they have a steady source of income.
- Bank account verification: The lender may verify the borrower’s bank account details to ensure that they have an active account and to facilitate loan repayments.
Why Are Checks Carried Out For A Payday Loan?
All responsible lenders try to ensure that their clients can afford the loan that they are requesting before approving it. Pheabs carries out these checks to prevent the difficult situation that arises when you can’t repay the loan and fall into gathering debt. If you become unable to meet repayments on time, this could negatively impact your credit score, cause wage garnishment, or create a lawsuit. The checks carried out are important to protect both the client and the lender.
Do Payday Loan Credit Checks Affect My Credit Score?
There are two types of credit checks: soft credit checks and hard credit checks.
- Soft credit checks are typically carried out during pre-qualification or pre-approval processes and do not affect your credit score.
- Hard credit checks are carried out when you apply for credit and can impact your credit score.
When you apply for a payday loan, the lender may perform a hard credit check, which can lower your credit score by a few points. However, the impact is usually temporary and should only last for a short period of time, as long as you continue to make your loan payments on time and manage your credit responsibly. Multiple hard credit checks within a short period of time can have a more significant impact on your credit score, so it is best to avoid applying for too many loans or credit products at once.
If you are concerned about the impact of a credit check on your credit score, apply using Pheabs. We use soft credit checks to avoid impacting your credit score negatively.
How Long Do Payday Loan Credit Checks Take With Pheabs?
With Pheabs, the loan request process is completely online. All credit checks are an automatic part of the loan enquiry process, which allows us to provide an instant decision on your loan. Banks can take weeks to come to a decision and often deny poor credit scores when reviewing your loan.
If your loan request isn’t approved, you’ve wasted time and effort, and still don’t have the cash you need. Our results come back almost instantly to help you get a running start at getting your finances under control. Once you have been approved for a payday loan with Pheabs, your money will be in your account in one lump sum the same day you are approved!