No credit check payday loans are payday loans where the lender does not pull your full credit report from Equifax or TransUnion. Instead of judging you on your credit score, the lender looks at whether you have regular income and a bank account that shows you can repay on your next payday.
What "no credit check" really means
There are two kinds of credit checks. A hard inquiry happens when a lender pulls your report to decide on credit. It is visible to other lenders and can lower your score slightly. A soft inquiry is visible only to you and has no effect on your score. Many payday lenders use neither, or only a soft check. That is what the phrase usually means.
What lenders look at instead of your score
- How often and how regularly your pay is deposited.
- How long you have had your bank account and your job or income source.
- Whether you have recent returned payments or many other payday loans.
- Whether the repayment fits within your pay. In Ontario and British Columbia, the loan cannot be more than 50% of your net pay.
Will a no credit check loan affect my credit score?
Applying usually will not. Repaying on time usually will not help either, because most payday lenders do not report on-time payments to the credit bureaus. The risk is one-sided: if you default and the debt is sent to a collection agency, the collection can appear on your credit report for years.
Who these loans can help
People who are rebuilding after a consumer proposal or bankruptcy, newcomers without a Canadian credit history, and people whose score was hurt by a past emergency can often qualify based on income. If that is you, also look at a secured credit card or credit-builder loan, which help rebuild your score at much lower cost.
Keep the cost in view
A no credit check payday loan costs the same as any other payday loan: up to $14 per $100. Borrow the smallest amount that solves the problem and plan the repayment before you sign.