Does your credit score prevent you from getting retail store credit cards?
You know the story: You visit a store, find exactly what you’re looking for, and immediately sign up for a store credit card. Later you find out that agreement came with a snag: an astronomical interest rate. Most of the retailer stores offering credit cards will cost you an interest rate from 15-23 percent, or more. A lower credit score often causes even higher interest rates, which are on top of annual fees.
Millions of Americans are adversely affected by bad credit. In fact, more than 42 million Americans have a credit score of 598 or less. The number grows even higher with time. It’s difficult to secure traditional financing with poor credit conditions. This is problematic for consumers who need a new HVAC system, kitchen appliances, vehicle loan… the list goes on.
No credit needed loans to the rescue?
The Good News (or perhaps bad news) is that some creditors offer No Credit Needed financing. No Credit Needed (NCN) is being promoted virtually everywhere these days. This kind of messaging is being targeted at consumers who have poor or no credit at all. Though, as a consumer, you have a choice to make.
Obviously, the ideal scenario is to avoid no credit needed everything. If you find yourself in the position of needing one of these lines of credit, there’s a smart way to do it. You have to decide which No Credit Needed offer is best for you and even more importantly, which choice is best for your credit and repayment ability. These decisions shouldn’t be taken lightly.
Applicant’s Qualifications for NCN?
It’s easy to get No credit needed financing in terms of payday loans, auto loans, or high-interest credit cards. There are few qualifications needed for such financing as compared to typical standards for a traditional loan.
- The applicant must be 18 years old in order to use this service
- An active checking account of the applicant is also a must.
- The account must have been open for at least 60 days.
- The income verification is also important and needed. The applicant needs to prove that he earns $1200 or more per month.
This relatively easy checklist makes obtaining these lines of credit pretty simple. But, they come at a price. The extremely high interest rates of these loans will likely double the original cost of the goods. They will also take exponentially longer to pay off due to the sky-high interest rate.
Does Your Credit History Impact the Lender’s Decision?
One of the best advantages of NCN is that credit history is not needed. This eradicates many steps involved in the application of a traditional loan. These loans are based on the factors mentioned above. Specifically, if you can prove your income and provide a valid bank account for payments to be auto-drafted from. These lenders are basing their decision on your assumed ability to repay, rather than your credit score.
The only real advantage here is that you can obtain credit without a standard inquiry on your credit report. Not nearly enough reason to sign one, but a positive if necessary.
Advantages of No Credit Needed Financing
We’ve talked a lot about the potential negatives of these loans, but there are some benefits. Specifically to those in a pinch, or beginners with good money management skills. Obviously, if you suffer from a bad credit score, this may be one of your only options.
The first and foremost advantage is that the credit report/check is waived. There are a number of other benefits such as:
- For beginners, the process is much faster, and approval is easier as compared to a traditional loan.
- The average time in filling an application for this type of credit is 20 minutes.
- You don’t need surety to get approved for the loan. It means that there is no need to risk the title or your home or car in order to get approval.
How to Find no credit needed loans?
This is not a kind of loan you get from the bank. Also, while in the past many box retailers offered no credit financing, most have switched to offering their own credit card.
Nowadays, it is easy to find No-Credit-Needed loans on the internet. There are many creditors that deliver no credit required loans for payday and auto loans.
This sounds too good to be true
The payday NCN loans can be both good and bad for the borrower. The main point is to manage these types of immediately approved loans. As a consumer, you should do your homework and use these tips when choosing the right company.
When do I need one and how do I choose?
As a borrower, you should follow these rules before signing:
- Use these loans only in emergencies. These include house repairs, car repairs, or accident, etc.
- Make sure that the lending company has a business permit to work in your area.
- Always choose lenders with a good track record or reviews.
- Use the internet to research the company, see what other consumers are saying.
- Similarly, make sure that you have a handsome running income that can refund the loan within the timeframe allotted.
Will a no credit needed loan affect my credit?
While this type of loan may not require a credit check to receive, it can certainly have an adverse effect on your credit. You’ve accepted the loan terms, signed the paperwork and have your money. The time comes to make the steep repayment conditions, and finances are short. If payments aren’t made, this debt can be sent to collections which appears on your credit report.
So, yes, it can. If you have good money management skills and are able to repay these loans quickly, you’ll likely be okay. Our best advice is to avoid this type of situation if possible. But, when it’s necessary, research your offers and choose the one that benefits you the most. And, as always, pay your bills on time 🙂