- A credit check is carried out automatically whenever you apply for a loan
- It is a way to assess your eligibility for a loan
- A bad credit score will not necessarily affect a lender’s decision
What is a Credit Check?
Simply put, a credit check is a financial check automatically carried out when you apply why for any kind of loan. These checks will be part of the application process for a loan and will mean that the lender will be able to accurately assess whether you can afford to repay the loan. By accessing details of your financial situation and history, a lender will be able to better assess your worthiness for a loan.
How Are They Carried Out?
A lender will pay an agency to access your information in order to carry out a credit check. Usually, before a check is carried out a lender will ask your permission to access your information.
Once the lender has access to your financial information, they will be able to see what current financial commitments you have and better assess whether you can afford a loan. A credit check is carried out automatically, and you do not need to compile the information yourself.
What Will a Lender See During These Checks?
Typically, when a payday lender carries out a credit check they will be able to see:
- Your full name and date of birth
- Electoral roll information to confirm your current and previous addresses
- All loans, credit card and mortgage accounts that are open, their start date and loan amounts. All accounts closed in the last six years will be listed.
- Current account overdraft
- Previous application searches and footprints
- Joint accounts with other people e.g spouses
- Any missed repayments and number of times it has happened
- History of debt including bankruptcy and CCJs
- Information on whether your identity has been used for fraud
Will I Receive a Credit Check?
Yes. Because a credit check is an automatic part of the application process, everyone who applies for a payday loan receives one of these checks.
Do I Need a Credit Check for a Payday Loan?
Yes. A credit check is part of the application process when you apply for a payday loan. It happens automatically and means that the payday lender can make a well-informed decision about providing you with a loan. When you apply for a payday loan a poor credit score doesn’t mean that you won’t receive a loan. However, a check is still carried out.
Will a Bad Credit Score Affect me Receiving a Payday Loan?
A payday loan is unique in that a bad credit score will not prevent you from receiving a loan. Finger Finance considers all credit scores, even those with a poor credit score can receive a payday loan.
We carry out a credit check, like any responsible payday lender, to make sure we are not lending money to those who cannot afford to borrow. Being unable to repay a payday loan can be stressful and result in unpleasant outcomes, including going to court and worsening your credit score. For this reason, it is important that thorough checks are carried out whenever somebody wishes to borrow money.