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Got bad credit? If you do, it can feel like getting a loan of any kind is impossible. Most legitimate lenders are going to run a credit check, and you’re worried that the second they see your score, they’ll turn you down, right? However, there are lenders who will still lend to people with bad credit, and some even offer a no credit check loan. If you’re asking yourself, “what is a no credit check loan, and is it too good to be true,” then read on.
Below you’ll find information on what kind of no credit check loans are available and what to watch out for.
Everything You Need To Know About What Is A No Credit Check Loan
Let’s discuss a few things about credit checks, and how a direct cash installment loan can affect your credit.
Difference Between Hard Credit Checks vs Soft Credit Checks
We will start by defining what a hard credit check means. Basically, it means they pull a full copy of your credit history, and it typically happens when a person is applying for new credit options. If you do this too many times, then lenders will view all of these hard checks as a sign that you are desperate for credit. It will be highly unlikely that lenders will give money to someone who has these hard checks on their credit history. In fact, usually a hard credit check lowers your credit score by up to five points.
On the other hand, a soft credit check shows much less data than a hard check. Instead of pulling a full report of all of the credit reported over your lifetime, a soft credit check simply provides lenders a brief overview. Soft credit checks don’t require authorization, while hard checks do. Have you gotten “pre-approved” credit card offers in the mail? It’s more than likely that these companies ran a soft check on you before sending you those offers.
The great thing about soft credit checks is that they don’t show up when other people or lenders are looking at your credit report. You’ll be able to see it if you pull it yourself, but other parties will only see the hard credit checks. This means that they have no affect on your credit score – which is good news for you if your score is low.
What Is A No Credit Check Loan?
Now that you understand the differences between a hard and soft check, let’s answer the question “what is a no credit check loan.” No credit check loans are funds that are given by direct lenders that do not conduct a hard credit inquiry. Instead, they’ll review your income, your bank information, and ask for other personal details to help them decide whether or not giving you money is worth it. Typically these loans can be a variety of things, including installment loans, payday loans, or even lines of credit.
Borrowers seeking these types of loans are only looking for them to meet a pressing need, and they’ll want to pay them back quickly and on a short term basis. If you’re in need of quick cash, these types of loans are alluring, especially since they don’t appear on your credit report. The downside is that these loans usually come with fees and high interest rates that really add up if they aren’t paid back in a timely manner.
Alternatives To An Expensive Payday Loan
You’ve most likely been warned that no credit check lenders go hand in hand with payday lenders. The reason that payday lenders don’t often check their customer’s credit is because they don’t care if you can’t pay back their loans – they’re just trying to get you into a further debt cycle.
An installment loan works differently. Payday loans are due all at once, while installment loans are paid back over time, which can make them easier to pay back. If the lender reports your payments, on-time payments can also help a credit history. Either way, only borrow what you can afford to pay back, and check your budget before you sign.
If you need cash quickly, look at the cost as well as the speed. Read the terms, and ask how the lender checks your credit and how long a decision will take.
If you decide to borrow, see your loan options, and keep in mind that lenders may still run a credit check.