Do Alternative Lenders Check Credit?

It’s no secret that having great credit comes with plenty of opportunities. Conversely, those who have a credit score that isn’t so stellar might encounter difficulties they otherwise wouldn’t.

The good news is that there are alternative lenders that are more accommodating when it comes to financing.

Wondering if these lenders check credit scores? Let’s take a look at everything you need to know.

What Is Alternative Lending?

As the name would imply, alternative lending involves borrowing money from non-traditional providers.

To elaborate, most people would visit a bank or similar financial institution in order to secure funding. These facilities often take a look at a wide range of criteria, including credit scores.

An alternative lender, on the other hand, operates slightly differently.

These are typically private companies that provide financing for their clients entirely online. This allows them to maximize the rate at which they disburse funds.

They are also notably more flexible when it comes to the criteria they check for.

Do They Check Credit Scores?

On the surface, yes — alternative lenders do check credit scores. However, they look at certain factors that credit bureaus typically do not.

They then use this information to calculate what is known as an alternative credit score. This is more or less a closer look at how financially reliable someone is.

Alternative data is much different than what most lenders would look for in an ideal applicant. To elaborate, traditional credit data often consists of the following:

  • Credit card activity
  • Loan history
  • Payment history
  • Bankruptcy

In contrast, alternative credit data involves:

  • Rental payments
  • Utility payments
  • Owned assets
  • Public records

As you can tell, there are plenty of ways that someone can prove themselves as a borrower by using alternative credit data.

For example, this is a great choice for someone who may have a high amount of credit card debt but also a large number of valuable assets.

How Can I Find a Lender?

Connecting with a lender is a straightforward process. In fact, it’s just as easy as finding a conventional lender.

To help streamline your search, though, we offer access to a platform that connects you with the most appropriate lender for your situation. From here, you can browse a list of alternative lenders and take the fine details into consideration, such as loan repayment terms.

Not only does this save you time, but it can allow you to get the best rates possible.

You can visit this page to get started.

Finding the Right Alternative Lenders Is Easier Than You Think

After you find the alternative lenders who are right for you, you’ll have no trouble securing financing. Keep this in mind when moving forward so that you can make the best decision for your future.

Want to learn more about what we have to offer? Feel free to get in touch with us today and see how we can help.

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