Payday Loan Lenders Don't Do Hard Inquiries

Borrowing from payday loan lenders is easy and convenient regardless of your credit score. This is because lenders don’t do a credit check for a payday loan. This is important for people trying to improve their credit score as well as those with bad credit.

When you apply for a credit card or a traditional long-term installment loan with a bank or credit union, the lender does what is known as a hard inquiry. This is a credit check that can impact your credit score.

When you have several hard inquiries on your credit report, this will cause your score to drop because it shows that you have been applying for credit more than one or twice within the last couple years. This is a concern for lenders because it could indicate that either other lenders don’t trust you and aren’t loaning to you or that you are in the process of borrowing from other lenders at the same time you are applying to them.

A soft inquiry is different from a hard inquiry in that a soft inquiry happens when someone checks does a credit check for reasons other than to lend you money, such as when you check your own credit report or when someone is doing a background check on you for security purposes.

Fortunately, a payday loan lender doesn’t do any kind of inquiry because it doesn’t check your credit at all. If you are preparing to take out a major loan, such as a mortgage or new car loan, you may want to avoid a hard inquiry if you’re not sure if your credit is good enough to qualify you for the loan.

Borrowing from payday loan lenders can get you through deficit

This is where a payday loan can get you through a short-term financial deficit and prevent you from hurting your credit rating. For example, if you are in danger of missing a payment on a credit card, you could borrow from a payday loan lender to make sure that the credit card company doesn’t report you as being late while at the same time you don’t have a hard inquiry hurting your credit score.

Of course, the downside to all of this is the cost of the payday loan. You need to weigh those costs against the potential damage to your credit report if you don’t borrow the money. Also, consider how you will pay off the payday advance and how soon you will be able to do it.

This is because the same fees will be applied to the loan every two weeks unless you start to pay down the loan. At $15 to $30 per $100 borrowed every couple weeks, those fees can add up quickly and you could find yourself in a worse spot financially than if you just accepted the original hit on your credit report.

However, if you have some extra hours or a bonus coming on your next paycheck, then borrowing from payday loan lenders can be an ideal way to maintain a good credit score so you can get a traditional loan to secure your financial future.