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Do Online Payday Loans Check Your Credit?

Your credit rating or score is the measure of how risky it would be to lend you money, or in another sense, how well you have managed your credit in the past. It accounts for whether you’ve made payments on time or missed them, whether you’ve paid off debts in full or defaulted, and how many different forms of credit you have at any given time.

While there is no universal credit rating, several different credit rating bureaus make their own calculations and lenders use these to make up their own mind about whether to lend to you or not. The will also pass on your information to the bureaus to add to the credit report.

If you have a bad credit rating the last thing you might consider is taking out a loan, however many payday loan lenders promote that they do not check your credit rating at all. Is this actually true?

The short answer is yes! In the vast majority of cases payday loan lenders will not check your credit history as part of the application process. This makes it the perfect option for those that need emergency cash but would be rejected by banks and other financial institutions. What makes payday loans especially useful is that they can also issue the cash within 24 hours, making them a great resource in an emergency, whereas traditional banks loans can take may days going through paperwork and other procedures.

What Payday Lenders Are Primarily Interested In Is Your Income.

Because payday loans are a short term commitment (usually no longer than a month) all they want to know is that you have a pay check coming in the next few weeks that can meet the repayment amount (the principal plus finance charge). How much you earn is a key factor in how much you will be allowed to borrow, and some states regulate that you can only borrow a certain percentage of your gross monthly income anyway. Therefore your credit rating is not that important.

Generally all that is required to take out a payday loan is that you are over 18 years old, have a fixed address, have a regular source of income, and a checking account that accepts deposits and debits. This can all be entered online and you should be approved almost right away.

Are There Exceptions?

There are of course exceptions to this rule, though they are very rare. If the information you’ve entered on your application doesn’t check out or there are irregularities, payday lenders may lookup your credit report as a way of verifying your identity and to check whether there is any history of fraud. For example, if you’ve lied on applications before and your application doesn’t seem to check out, and then they find you’ve lied before you may be rejected.

Also if your application is borderline for being accepted or rejected, they may take a look at your credit report to help them make the final decision. This is probably only the case if you do not have adequate income. It is very rare for an application to be borderline, to begin with.

What Credit Bureaus Do Payday Lenders Use?

If you are one of the rare applicants that have their credit history checked, they will use the leading credit rating bureaus such as Equifax, Experian, or Trans Union. Interestingly however when they report about their own dealings with you it is often to the smaller bureaus, so any impact the loan itself might have on your credit rating is not always factored in when taking out other forms of credit in the future.


The average payday loan borrower will not have to worry about credit checks on their application and should be approved within minutes if they meet all of the standard requirements.