Possible Finance is a relatively new player in the financial technology (fintech) space, offering short-term loans and financial services. A key question many potential borrowers have is: Does Possible Finance check credit? The short answer is: it depends. While they don't perform a hard credit pull in the traditional sense that impacts your credit score, they do assess your creditworthiness through alternative methods. Let's delve deeper into their credit checking practices.
What Kind of Credit Check Does Possible Finance Do?
Possible Finance uses a "soft credit pull" and an alternative credit scoring method. This differs significantly from traditional lenders who conduct a "hard inquiry," which shows up on your credit report and can potentially lower your credit score. A soft pull doesn't affect your credit score. Possible Finance's evaluation considers factors beyond your traditional credit history.
What Factors Does Possible Finance Consider Besides Credit?
Possible Finance's lending decisions rely on a comprehensive assessment of your financial situation, going beyond just a credit score. They utilize various data points, including:
- Bank account information: They review your transaction history to understand your income, spending habits, and overall financial stability. This gives them a picture of your cash flow.
- Employment history: While not always explicitly stated as a requirement, stable employment is generally preferred, indicating a consistent income stream.
- Identity verification: They rigorously verify your identity to prevent fraud and ensure the loan is issued to the correct individual.
They utilize proprietary algorithms to analyze this data and determine your eligibility for a loan. This alternative approach allows them to assess borrowers who may be underserved by traditional lenders due to limited credit history or past financial challenges.
Does Possible Finance Report to Credit Bureaus?
This is another crucial question for borrowers. Currently, Possible Finance does not report payment history to the major credit bureaus (Equifax, Experian, and TransUnion). This means that on-time payments with Possible Finance won't directly improve your credit score. Conversely, late or missed payments won't negatively affect your credit score either. However, consistent responsible borrowing behavior can indirectly impact your creditworthiness over time.
How Can I Improve My Chances of Approval with Possible Finance?
While Possible Finance doesn't use traditional credit scores, demonstrating financial responsibility significantly increases your chances of approval. Here are some steps you can take:
- Maintain a healthy bank account: Avoid overdrafts and maintain a positive balance to showcase responsible financial management.
- Track your income and expenses: Understanding your cash flow demonstrates financial awareness, vital for loan applications.
- Ensure accurate personal information: Providing accurate and up-to-date information throughout the application process helps streamline the approval process.
What if I'm Denied a Loan from Possible Finance?
If your application is denied, it's best to contact Possible Finance directly to understand the reason for the denial. This information will help you take the necessary steps to improve your financial standing and increase your chances of approval in the future.
Is Possible Finance a Good Option for Me?
Possible Finance can be a viable option for individuals needing quick access to small loans, especially those with limited or damaged credit. However, it's crucial to compare their rates and terms with other lenders before making a decision. The high interest rates associated with short-term loans mean you should only consider them if you're certain you can repay the loan promptly to avoid escalating debt.
This information is for general knowledge and should not be considered financial advice. Always carefully review the terms and conditions of any loan before accepting it.
