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How does a credit check work?

business finance
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One of the crucial financial review methods for customers potentially requesting loans is a credit check. Not only is this process relevant for payday loans, but it’s also quite significant for other types of financial aid.

In essence, it’s the thorough evaluation of your financial data and personal information that enables the lenders to make the right choice. Although jail time can be given for failure to repay the money owed, it’s in nobody’s interest to make a troublesome loan deal.

That’s why the financial institutions and lenders perform a credit check for an accordant assessment of the repayment capacity. It is related to every payday loan and other loan provided by financial institutions. If you don’t know the mechanism on which the credit check operates, Nick Wilson, the founder of loan connection service AdvanceSOS and an expert loan officer, will fill you in on the details.

How is the credit check enforced?

If you submit an application to get a payday loan or installment loan, the credit check is performed by the lender. It’s a perfect way of getting an insight into your credit and financial history, personal details, and credit score.

The credit score is one of the most relevant factors to this field as it predicts the probability of repayment on time. It’s, therefore, a significant element for the lenders since it provides details on the person that requested a loan.

You should be prepared to be contacted by the lender asking for your permission to access your financial data. Of course, it’s the obligatory aspect of assessment and there’s no other way of getting a loan.

The financial expert will then take a look into your bank accounts and transactions, credit card history, and other details.

Information that the lender has access to

First, the lender will access your details and browse your bank account transactions. As the credit score consists of numerous data pointers, the lender will have access to all of its elements.

Therefore, the lender can check the following information:

  • Bank Account Details
  • Transactions made
  • Checking Account Details
  • Previously taken Loans
  • Amounts of loans taken
  • Credit Card Information

If you don’t have a functional bank account, the lender will usually take a look into your checking account. All the data on the previously closed accounts and cards will also be visible during the check.

After you give your confirmation to start the process, it can take up to a few days for the lender to check all the details. On the other hand, it’s not such a rare occurrence for the lender to check all the available financial information for security.

A credit check is the only way of truly confirming the ability of the client to return the funds at a designated date.

How is the credit score determined?

From the moment you apply to borrow money via loans, your credit score is evaluated by the lender. A wide range of factors can add up to the credit score evaluation, and it mostly relates to financial details.

However, even other unrelated aspects can affect the credit score balance. One of the things that are under review is your personal information. If the information isn’t easily available, the lender can get suspicious.

That’s why it’s a good thing to apply for the electoral inventory as the personal details will then be at your disposal. It’s also a great method of private data confirmation since the electoral library is trustworthy.

Other factors that affect the credit score are transactions and amounts of previous loans. Also, if you apply for a lot of loans at the same time, it negatively l affects your credit score.

If you are unable to meet your loan repayments, you can face legal actions, so a credit score check is good for both sides. It provides an overview of your reliability to the lender, while it also gives you a confirmation that you can truly afford the loan.

Credit check related to payday loans

Without exceptions, the credit check is obligatory for getting a payday loan. Those that apply for the loan without a proper credit check may be taken to court. So, it’s also in your best interest to enable the review of your financial data.

Although your credit score has to be high to get the loan, payday loans can be given even if someone has a relatively poor rating. It’s more of a reliability matter than just merely taking a look into your previous transactions.

AdvanceSOS can help you find the top loan deal perfect for your needs, no matter where you are in Florida, Texas, or California.

In all honesty, your financial information from a few years ago can’t truly harm your chance of getting the loan. If you’ve made the effort to improve your credit score, there’s a good chance that you will get the loan.

Payday loan credit score evaluation

When it comes to strictly payday loan evaluation of your credit rating, the lender will review several aspects. First off, the lender must confirm your identity and personal details. That’s why you will have to submit a voting list in case your information can’t be confirmed otherwise.

A credit score isn’t a game-changer when it comes to getting a payday loan. It’s more of insurance from the lending side that you can pay back the borrowed funds.

It is mostly based on providing your data and information on previous loans. If your credit score confirms that you can return the funds in the proper timeline, your payday loan will be secured. It usually doesn’t take more than a day for the lender to check your credit score.

Some cases have shown that you can expect to get the money instantly as soon as the credit score evaluation is complete. Payday loans are, after all, short-term loans, meaning that the lenders have to prove their refund reliability through the credit rating.


Story by Amanda Girard. Girard is the top financial copywriter of AdvanceSOS. She has helped the company grow and expand its reach to customers for the past three years. She holds a master’s degree holder in finance and is a well-seasoned copywriter of more than five years.

augusta free press
augusta free press