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3 Important Things About Credit Checks & Loans in Canada

Money problems will be faced by anyone at one time or another. At that point, the first option you start with is to take a loan. However, the worst comes next- namely, the credit check; this is where many who try to take help end up getting stuck. What is a credit check? What does it do? And most importantly, How does one get a loan without a credit check? Let's break it down simply.

What is a Credit Check?

A credit check is when lenders, landlords, prospective employers, or even service providers (like a phone or internet company) review your financial history and determine whether you are responsible with money. It's like a report card for your finances except that instead of grades, there is a credit score. Lenders use this to determine whether they should approve your application for a loan, credit card, or any type of financing. Generally, high credit scores mean trustworthy perceptions, while low credit scores can limit borrowing options.

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What Do They Look at in a Credit Check?

When your credit is being checked by a lender, he or she is considering several things, such as:

  1. Outstanding Debts – What are your total debts supposed to be? If you are in debt already, lenders might not be willing to lend you any more cash.
  2. Available Credit – What credit do you still have left? Maxed-out credit cards are almost always a big warning sign.
  3. Repayment History - Are you on time with your bills? Late payments and defaults decrease your credit rating.
  4. Legal Issues – Have you declared bankruptcy? Received a County Court Judgment (CCJ)? Lenders will look for historical legal financial issues.

So if you have a good credit history, congratulations! You are more likely to be given a loan at lower interest rates and in bigger amounts. But if you have a lousy score, things are much more difficult.

Why Do Credit Checks Matter for Loans?

Banks and traditional lenders employ credit checks to assess risks. It means they essentially want to know your likelihood of repayment. A good credit means that you handled credit well, and lenders would generally accept your application. On the other hand, missed payments, defaults, or huge amounts of debt have a negative effect on your credit score, and lenders see you as a risky borrower.

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Usually, the following happens according to your credit score:

  • Good Credit: Easy for you to get loan approval with lower interest and higher borrowing limits.
  • Average Credit: You can be approved, but the interest will be higher.
  • Bad Credit: A very high chance of denial, and even if accepted, tough repayment options for the loan are anticipated.

To them, traditional banks can end up being a dead-end. That is where the alternative lenders, such as Alpha Loans, come into play with the solution.

The Problem with Traditional Credit Checks

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The problem with the situation is that not every person with bad credit acts irresponsibly with money. Things do happen-medical bills, job loss, emergencies. You might have missed some payments in the past, but your current situation tells you that you are able to take the loan.

In fact, banks take the past as a yardstick for evaluating a person's credit and show no interest in his current affairs; thus, a person with a low credit score gets shut out almost always, regardless of any source of fixed income or ability to repay that loan.

And yet for another bad news, every credit inquiry into your profile actually drops your credit score even more. This is called hard inquiry, and too many of them can hinder your chances for approval going forward.

So how do we fix it? οƒ  No credit check loan.

How Alpha Loans Offers Loans Without Credit Checks

Here at Alpha Loans, we hold the view that your past should not have any effect on your future. This is why we grant instant loans in Canada without a credit check. Instead of concentrating on your credit score, we concentrate on something more important:

πŸ‘‰ Your current capacity to repay the loan.

How to Apply for a No Credit Check Loan with Alpha Loans

Loans should never be complicated; at Alpha Loans, we keep it fast and easy:

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  • Fill out a Short Online Form -no lengthy applications, just the important stuff.
  • Instant Decision -so you don’t have to wait weeks and weeks.
  • Fund Transfer -Once approved, money in your account in 24 hours.
  • That is how simple it is! No credit check. Just cash when you really want it!

Real Customer Story: How Alpha Loans Helped Lisa

" I was beginning a new job, but I needed some money to get to work and buy some clothes. My credit was not good, so banks rejected me. Alpha Loans approved me almost instantly, and I had the funds the next day. It was just the lifeline I needed!"

Conclusion

Consumer banks work way too much on credit scores and forget that some people do change for the better. Past problems with finances do not mean that this person cannot afford a loan here and now.

At Alpha Loans, we like to keep the loan simple, fast, and easy to access: No credit checks are necessary.

πŸ‘‰ Need a loan? Apply now and get approved in minutes!

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Aphaloans.ca is a loan broker. By applying, you consent to having your information shared with our partner lenders. You may be contacted via email and SMS by lenders who approve your request. Please check your junk/spam folder for emails. Approval is subject to lender discretion.