What is No Credit Check Payday Loans
A credit score refers to a numerical turn of phrase usually based on a level of scrutiny of credit files related to a person, to signify the creditworthiness of that person. Lenders, such as credit card companies and banks, make use of credit scores to assess the probable risk caused by giving somebody a loan and to alleviate losses owing to bad debt.
Credit scores are also used to decide who are eligible for a loan, at what credit limits and what interest rate. Not only banks, other organizations such as insurance companies, mobile phone companies, government departments and so on use credit scoring before providing loans to anyone to avoid unwanted circumstances and to divide down the risk of fraudulent activities. Credits checks prove vital for many reasons. It helps the companies, organizations or payday loan companies to protect their businesses, no matter whether it is small or big, from probable bad debt and great loss in the future, enabling to profile clients, and finally enhancing sales and cash flows if employed effectively. This will then release capital to loan out to other customers who are in need of financial help during an emergency. It can also benefit the existing customer, as once they have repaid the loan they may be eligible for better rates in the future.
Above are some of the reasons why companies offering loans like to carry out credit checks before lending to customers. So what are the benefits to the customer?
A Payday Loan is, basically, a short-term loan that provides you quick access to cash in emergencies. Payday loans depend on the clients being employed, have regular income, a UK bank account and debit card. Some companies will promote the fact that they lend to people without doing credit checks, but is this a good idea? At Redwallet.com we think not. It is not in our interest to lend to someone who will not be in a position to repay on the due date. A credit check is an effective way of assessing the state of a customer’s financial situation and if a payday loan is suitable for them.
When the Credit Checks should be Done
Credit checks should preferably be carried out periodically or regularly. We know very well that the credit statuses of a person changes from time to time and it is not a matter of surprise when we notice a sudden drops in payments of a good customer. So regular credit check of a client will be able to notify us early that we should not extend the lines of credit anymore.
Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk