Just about every adult has a credit score, and that figure can easily end up being one of the most financially important of all. Consumers with particularly high credit scores typically have many borrowing opportunities and can generally take out loans at the lowest rates of all.
Even people with low scores and negative marks on their credit reports, though, almost always have options of their own. In fact, it is possible to borrow money without even submitting to a credit check at all. A quick look at three of the most popular no-credit-check loan types will reveal that there are options worth considering.
The three major credit reporting agencies compile records and scores summarizing the borrowing and repayment activities of virtually all adult Americans. While using credit responsibly and keeping up with payments will open up new borrowing opportunities, falling behind will limit the available options.
As those who check out this blog will see, though, even consumers who have amassed especially negative credit records still have options before them. Of the trillions of dollars that Americans borrow every year, the following account for a significant share:
· Online loans.
· Lenders that need to pay for brick-and-mortar presences and all the expenses that go with them typically have to maintain fairly high standards in order to remain profitable. In recent years, though, lean-and-mean lenders that focus their efforts online have been upending the status quo. Although interest rates will generally be significant, borrowers who apply for personal loans from lenders that operate solely online can sometimes avoid credit checks entirely. In addition to being especially accessible for this reason, such loans tend to be particularly convenient to obtain. That has helped online lenders quickly become a major collective presence in an industry that is generally difficult to break into.
· Automatic withdrawal loans.
· Most communities of any size nationwide now host at least a couple of dedicated personal lenders. These businesses issue short-term loans, generally without conducting credit checks, that are repaid via automatic withdrawals from borrowers’ checking accounts. Taking out such a loan will most often make sense when only a truly unusual need has cropped up, as some consumers get pulled into a cycle of borrowing overly frequently and spending too much on the required fees.
· Collateralized loans.
· The reason that so many lenders insist on conducting credit checks is that a single default by a borrower can be costly, Unsecured loans can allow a borrower to walk away without facing any repercussions beyond harm to that person’s credit record. When someone already has a negative credit history, this might not amount to much of an incentive at all. Putting down collateral to secure a loan, as with how pawn shops operate, can open up options for borrowers whose histories might not normally qualify them for credit.
Many otherwise reasonable, practical people end up with negative marks on their credit reports through no fault of their own. Others find themselves needing loans despite not having built up borrowing histories that the average lender would consider sufficient. Taking out a loan that does not require a credit check can be the best available option in such situations and others. Borrowing responsibly is always important, and there are opportunities even for those who do not have impressive credit scores to rely on.