Typically, when applying for a loan, the prospective lender will conduct a credit check (sometimes called a credit inquiry) on the borrower. A no credit check loan is a viable alternative to traditional financing for those seeking a loan but who know their credit history won’t pass muster.
A credit check allows a business to obtain access to a prospective borrower’s credit report from any of the three major credit bureaus – Experian, Equifax, and TransUnion. These inquiries are particularly important if the borrower requests a significant amount of money, like for a home mortgage or car loan. These reports will show the borrower’s finances and ability to pay.
If a borrower’s credit history displays an abundance of late or missed payments, too many recently opened accounts, or a high credit utilization rate (e.g., maxing out credit cards), the lender can deny the loan application. These red flags negatively affect one’s FICO credit score as well, and borrowers rated below 600 are lacking in https://paydayloan4less.com/ terms of creditworthiness. Credit checks exist to protect the consumer from borrowing more than they can repay and protect the lender from financial loss.
Perhaps you’ve experienced bankruptcy or dealt with collection agencies in the past, which would lead to a damaged credit rating, but have been responsible with your finances since. Lees verder