It is only natural that a lender is interested in accepting reliable borrowers who are likely to repay on time. Thus, loan eligibility standards may be rigid, which is especially true for conservative banks offering long-term borrowing options. Payday loans without teletrack, however, are known to have multiple advantages over traditional banking, including softer application requirements. How lax are these, and could you still secure a payday loan with zero credit records?
Borrowing history is the main and the most telling indicator of an applicant’s ability to fulfill their obligations. The more loans you successfully repay – the better your score and the more willing a lender will be to accept you.
Understandably, in online lending, so drastically different from face-to-face interviews, these records are the first thing a lender will consult.
Here, non-existent credit records may be viewed more favorably than bad credit records, as the latter clearly indicate an applicant’s financial irresponsibility. Moreover, credit history is not the only source involved.
Upon receiving your application, the lender will initiate remote identity checks. They will access your credit records to verify identity and establish your trustworthiness.
If credit bureaus return no matches, which means that no such records exist, the lender may turn to alternative public sources of data – for example, rental payments, property deeds or utility bills – to find transactions in the applicant’s name. Such data may be accessed through third parties (for instance, RSA). Finally, if these efforts fail as well, the last resort is a manual review.
This naturally requires time and manpower, so not all lenders will go to such lengths. However, if they do, you may be asked to do the following:
- provide an email, fax, or upload a copy of a photo ID;
- answer additional questions by phone;
- visit the company’s office for an in-person interview.
With a steady source of income, absence of borrowing history does not necessarily present an obstacle to payday lending. For young people, the absence of borrowing data is an obvious problem.
How can you open your credit history unless you are allowed to take out loans? The same applies to recent immigrants who are yet to acquire credit records. Such applicants are usually rejected by conventional lenders, which makes cash shortages especially hard to cope with. This is exactly when payday loans may be a blessing.
A comprehensive approach of a payday lender may ensure responsible first-time borrowers still get a chance to resolve urgent financial problems.
By using and successfully repaying payday loans, they have an opportunity to build up a favorable credit history. This, in turn, opens them access to more complex borrowing options in the future.