Bad credit is easy to get, and hard to get rid of. The consumer credit rating system follows us wherever we go–to the bank, to the supermarket, to the record store, recording every transaction we make. Forget to pay your telephone bill? Were you a little late on your rent, your student loans, or your credit card bill?
All these infractions are duly logged into the system and affect your credit score. Late payments are logged, as are the dates you paid off loans or credit cards. The next time you apply for an apartment, buy a car, or purchase your first home, your credit score will be assessed and will factor in to the decision. For those who have missed payments and have a low credit rating, obtaining a small loan or a credit card can be very difficult.
To assist people who have a job but need a little extra cash, a new lending service has become available. It goes by several different names: no credit check loans, cash advance loans, or payday loans. These services can be found online and also at cash advance stores.
Here’s how such a loan works: A borrower needs $100 and presents proof that he is employed and will have that money by his next payday. The lending company gives the borrower a check that can be cashed immediately, and in return the borrower writes a check to the lender for the principal plus the lender’s fee, post-dated to the date of the next payday. The borrower gets quick cash, and once payday rolls around, the lending company cashes its check. Although such services are meant to be used as backups, they are extremely handy for emergency car repairs, short-notice travel, doctor visits, and more.