The Truth About No Credit Check Loans

When you apply for a no credit check loan, the lender will make an approval decision without conducting a hard credit check at one of the three major credit bureaus. The lender may, however, have other minimum requirements that borrowers must meet — having a bank account or demonstrating a steady source of income, for instance. Depending on the type of loan, borrowers may be required to provide collateral to secure the loan — this is the case for title loans.

In place of a hard credit check, some lenders perform a credit check with an alternative data source that doesn’t reveal or affect your FICO or VantageScore. These types of alternative credit checks provide lenders with a range of information that can help them approve applicants who might otherwise be denied because of a low credit score. It’s important to note that alternative credit checks will show up on reports from these alternative data sources and could negatively affect scores calculated by those sources.

Because no credit check loans don’t involve a hard credit check, they won’t appear on your credit reports at the major bureaus when you apply. Many lenders who offer no credit check loans also don’t report your payments to the major credit bureaus. This means that your payment history won’t affect your FICO score or VantageScore — either positively or negatively. However, be wary of defaults, as any debt that’s sent to collections will almost always appear on your credit report and can significantly damage your score.

Lenders may advertise “guaranteed approval,” but few — if any — actually offer it. When you apply for a loan, lenders will almost certainly want to ensure that you meet some basic criteria. Payday lenders, for instance, will likely want to see that you have an active checking account. A title loan company will want to see that you have clear ownership of your vehicle. At the very least, lenders are required to ensure that you meet age requirements to sign a loan contract.

While lenders who advertise “no credit check” and “guaranteed approval” may or may not actually offer those services, there are certain types of loans that typically do not require a hard credit check. These include certain personal loans, payday loans, title loans and pawn shop loans.

To get a loan with no credit check, begin by researching lenders. Be sure to consider your financial needs when choosing which is right for you. Consider things like the loan options they have available, what their interest rates are and the loan amounts they offer. Research their customer reviews. Once you’ve chosen a lender, gather the information and documents required to apply and submit your loan request or application form.

Neighborhood Trust offers installment loans or personal lines of credit and performs an alternative credit check that won’t affect your FICO score or VantageScore. Visit our Rates & Terms page to see what we offer in your state and apply online in just minutes.

There are many types of loans that don’t require a hard credit check and may offer approval to borrowers with a lower FICO score or VantageScore. Some of the most common are personal installment loans, payday loans, title loans and pawn shop loans. These types of loans often come with high interest rates and fees so be sure to consider all your options before applying.

• Installment loan — A personal installment loan can be one of the easier loans to qualify for. You’ll receive a lump sum payment up front to help cover your expenses. You’ll then repay in smaller installments according to the schedule outlined in your loan agreement.

• Payday loan — Payday lenders offer a cash advance to carry you through to your next payday. With these kinds of quick loans, the lenders will need to verify your income and identity, but they typically offer lower loan amounts. You’ll also need to repay the loan in full, plus interest and fees at the end of the term (often on your next payday).

• Title loan — A title loan is a type of secured loan that uses your car as collateral. Because your vehicle is securing the loan, these lenders typically won’t need to run a credit check. They have a relatively short repayment period (about 30 days) at the end of which you’ll need to repay the loan in full. In the case of default, these loan providers reserve the right to seize and sell your car to recoup their losses.

• Pawn shop loans — These are another type of secured loan. But instead of your car acting as collateral, it’s an item of value. And, the lender is a pawn shop not a financial institution. These loans are typically cash loans and usually for smaller amounts with higher interest rates. But they usually won’t check your credit and they can provide you with some fast cash in a pinch. If you fail to repay, they reserve the right to sell your item to recoup their money.

When you apply for a loan or credit card from a more traditional lender like a bank or credit union, they’ll usually run a hard inquiry to determine your creditworthiness. Many lenders require that borrowers meet certain credit requirements before they can extend a loan offer. This is because your FICO score or VantageScore credit scores are a reflection of your creditworthiness.

So a good credit score means you’re more likely to repay, while a poor credit score means you could be considered risky to lend to. Your credit score may also be used to determine things like your annual percentage rate, loan amount or credit limit and what type of loan options are available to you.