Monthly Archives: November 2018

Shopping for a Payday Loan Consolidation?

shopping for a loan 

What happens when you’re shopping for a loan?

Did you know that your credit score could take a hit when you submit a loan application?

That’s because of something called a credit inquiry, which can occur with each application. There are two types: one type, a hard credit inquiry, affects your credit score. The other type, a soft credit inquiry, does not.

What’s a hard credit inquiry?

According to credit reporting agency Equifax, a hard credit inquiry occurs “when a lender or company makes a request to review your credit report as part of the loan application process.”

Therefore, if you apply for credit, there will be a hard inquiry.

What’s a soft credit inquiry?

A soft credit inquiry doesn’t happen when you’re submitting an application for credit. Therefore, it doesn’t affect your credit.

Credit reporting agency TransUnion describes a soft credit inquiry as “a more routine check that can be done without your permission.”

This type of inquiry happens when someone is checking your credit for other reasons. Experian, another of the big three credit reporting agencies, lists a few such reasons as such:

  • Pre-screened offers for credit.
  • Account reviews by your existing lenders.
  • Requests related to employment.
  • Requests for insurance purposes.
  • When you request your own credit report.

How do inquiries affect your credit score?

Essentially, applying for too many loans or lines of credit can make it seem as though you’re overextended and desperately need credit to meet your needs- payday loans consolidation legitimate lenders.

And since lenders naturally see this as a risk, these large amounts of hard credit inquiries can negatively affect your credit score.

How much does this affect your credit score? According to MyFico, it depends on your credit history:

“For most people, one additional credit inquiry will take less than five points off their FICO Scores. For perspective, the full range for FICO Scores is 300-850. Inquiries can have a greater impact if you have few accounts or a short credit history.”

No big deal, right? Well, as long as you don’t pull too many hard credit inquiries. Because when you hit that critical number, statistics start to hurt you:

“Large numbers of inquiries also mean greater risk. Statistically, people with six inquiries or more on their credit reports can be up to eight times more likely to declare bankruptcy than people with no inquiries on their reports.”

That said, it’s important to keep this in perspective, as inquiries are not the greatest factor in your credit score:

“While inquiries often can play a part in assessing risk, they play a minor part. Much more important factors for your scores are how timely you pay your bills and your overall debt burden as indicated on your credit report.”

In other words, your payment history and credit utilization are far more important. That said, the last thing you want is to lose out on a loan because you filed too many applications in search of the best interest rate.

So how can you make sure that doesn’t happen?

Can you protect your credit score while loan shopping?

Lenders know that putting in more than one loan application isn’t always an act of desperation. Rather, it’s a search for the best rate and terms.

So how can a lender tell the difference between “too many” hard credit inquiries and rate shopping? MyFico explains how:

“FICO scores ignore inquiries made [on mortgages, auto loans, and student loans] in the 30 days prior to scoring. So, if you find a loan within 30 days, the inquiries won’t affect your score while you’re rate shopping.”

That’s great for the first 30 days, right? But you still don’t want your credit score to take a hit after you’re finished rate shopping. If you do it right, it won’t:

“In addition, FICO Scores look on your credit report for rate-shopping inquiries older than 30 days. If your FICO Scores find some, your scores will consider inquiries that fall in a typical shopping period as just one inquiry.”

This typical “shopping period” can be as low as 14 days (when using older versions of FICO’s formula) or go up to 45 days (when using newer versions of the formula). The formula used depends on the lender checking your report.

Use shopping periods to your advantage

How can you maximize your rate shopping and loan application process to have a minimal detriment to your credit score? Shop fast and for the same amount.

If you apply for all the same types of loan (an auto loan, for example) and for the same amount ($20,000 for example), then that sends a clear signal that you’re rate shopping.

And, since you won’t be able to tell which model of the FICO score your lender is pulling, go ahead and try to keep it all within the shortest possible “shopping period” – 14 days.

Keep in mind that varying your loan amount or throwing a different type of loan into the ring (or worse, a credit card, which doesn’t fall into the same principles as loans) will result in another hard credit inquiry. Avoid doing this if at all possible.

In the end, if you shop for rates by applying for the same type of loans for the same amount within 14 days you won’t hurt your score. And if you find a lower rate by doing so, you’ll end up paying less over the life of your loan.

Quick personal loans at the click of a mouse

70% of the world’s population will have a smartphone in their possession in 2020, according to the forecasts made by Udo Gollub, a German scientist. Considering the penetration of smart mobile devices in our society, it is not surprising that many of the requests for fast personal loans from Fintech companies are made through these devices. This type of credits triumph, among other reasons, by the ease with which they can be obtained. The application process is so simple that it makes it optimal for those who prefer to access offers through their phones. Currently, there are already many people who apply for their loans online with these devices and this trend is likely to increase.

3 personal loans instantly to request in minutes

Consumer habits and commerce are evolving in such a way that more and more users prefer to buy on the Internet from their mobile devices. Although online purchases are still more made from the PC, according to PWC Total Retail Report 2017, the trend seems to increase towards the mobile compared to the previous year. In particular, 14% is the growth of people who buy from their mobile device at least once a week. More and more people have smartphones, this may be one of the reasons that make consumption through this device rise in the coming years. However, that the customer uses the mobile to consume depends also on the effort made by companies to promote this trend in their own businesses.

Given this panorama, the fast personal loans sector has known how to develop its business and has oriented it to promote the use of its services through mobile, for example, creating its own applications or facilitating and expediting the application process.

Quick personal loans are easy to request, this could facilitate access to these credits from our smartphone. The form is simple and will not require submitting excessive personal or financial data. Also, they will not require too many paperwork and they will never be face-to-face. All the documents that ask for us we can send them by email or even, by WhatsApp. In addition, we do not have to send a photocopy of the documents, nowadays it is possible to do it through a photograph, for example, of our ID. These types of advantages are specially created and fostered by these private equity companies to improve their service and facilitate the client to be able to get the personal loan quickly and from any device.

What makes these personal loans so fast?

If we talk about speed, the personal loans that we have just seen do not really have competition within the online loan sector. Moreover, it is often said that they are the kings of urgent money. We know that the key to success is speed, but how do you get such fast service?

When dealing with smaller amounts than other types of credits, private equity companies will not ask us for so many requirements or conditions. In addition, the process of analyzing the request is done through algorithms that can study whether we are suitable or not automatically. As a result, the lenders will not have to study for so long the profile of their customers, therefore, they can decide whether or not they grant it to us in much less time. Obviously, this does not mean that anyone can get money fast, but it will be easier to access them because the risk is not the same as if they were loans of much higher amounts.

In addition, to all this, we must add the new identity verification systems that integrate into your service as Instantor or Kontomatik. These tools allow them to accelerate the time they invest in studying applications and generate faster responses. These tools work with a system that allows them to access our bank accounts automatically, so we will not have to send a bank statement. This makes the application process even simpler and faster and, therefore, we can get the answer in minutes.