Forget Payday Loans – What’s The Average Credit Score?
At direct-payday we’re asked all the time by consumers seeking a direct payday loan how their credit score ranks compared to the rest of the population. Well, it turns out the exact average credit score at any given time is hard to determine especially when you factor in the effect of payday loans. Reason being, it takes months to calculate the most recent data from Fair Isaac and the three major credit bureaus. Once the information is released it’s not entirely accurate and is usually a few months old. However, if you were to look at the most recent data from Experian it would show the average credit score being 694. This average score is based on the Fair Isaac Risk Model that Experian uses. Keep in mind this data does not include payment data submitted by direct payday lenders. Over the past few years many direct lenders have increased their reporting of payday loans and installment loans. It’s a bit to early to tell what effect payday loan companies reporting payment history will have on credit scores but it’s something to keep an eye on.
Most direct lender payday loans will not require clean credit history
As we wrote about in our blog a few weeks ago, your credit score can range from a low of 300 to a high of 850. These numbers are regardless of whether you have online payday loans or not. Most consumers seeking a payday loan will generally be on the lower end average of 703. If you’re credit score is well above 703 then you would be better served by a bank loan compared to working with a direct payday loan lender. Don’t be upset it your borrowing history is worse than the national average quoted by Experian. This is usually caused by a direct loan that may become delinquent. If you’re within 50 points of 700 you can make repairs to your credit report and get over the 700 hump! Even if your below 600 you can make some lifestyle changes. Pay your online payday loans and installment loans on time. By doing this you can get your score up to an average ranking. According to Experian’s data the majority of consumers fall into the 600-800 range. The Experian data also shows that many consumers seeking payday advances are in the 400-650 range. This is not always the case. But there’s no reason for someone with an excellent credit score to seek out any of the large direct payday lenders. As someone looking for a company that offers direct payday loans you know only a small percentage of the population has a score under 550. The same is true for consumers with a score over 800. It’s much more difficult to obtain a score over 800 than it is to get your score under 600. Especially if you’re delinquent on past due bills!
The well known credit score has proven to be an impressive algorithm. It can be used to calculate risk when assessing online payday loan request information. For example, if you have a FICO score under 550, FICO estimates there is a 85% chance that you will make a payment 90 days late or worse over the next two years! On the flip side if you have a score over 750 FICO figures that same scenario will only happen 3% of the time. Keep in mind, online cash advances and direct lender payday loans can affect your score! This data goes to show how important it is to have at least an average credit score when applying for a credit card. It’s also import for installment loans or even long term direct payday loans. Ever since the recession, direct payday loan lenders have pulled back on lending. Many companies have instituted stricter lending requirements. A 665 credit score in 2019 is not the same as a 650 in 2008! It’s more important now than ever to pay your past due debts on time. Do all you can to improve your lending history. Try to improve you credit score and move on from direct payday loans to installment loans and credit cards!
Looking for a company that offers online funding? Be sure to check your credit first!
Are you rebuilding your credit history? Still think you need to find a company that offers cash advances or even car title loans? Feel free to check out our list of direct payday lenders and direct installment lenders today!