Teletrack & Payday Loans - The Real Story
Some payday loans companies use a credit reporting system called Teletrack. Like the major credit reporting agencies, Teletrack keeps a record of certain transactions on a potential borrower’s credit past. However, Teletrack is different than the other, major credit reporting companies in that its reports are typically limited to check histories and defaulted or negative-balance checking accounts.
Some payday lenders erroneously claim to offer "no credit check payday loans" while at the same time subjecting their prospective borrowers to a Telecheck analysis. While this is technically incorrect, it is still partially accurate in the sense that the credit reporting agencies never show where an inquiry has been made into an applicant’s credit report.
Since 1989, Teletrack has provided payday lenders with a minimal amount of checking account and bankruptcy information on loan applicants. The system is successful. Companies that often report to Teletrack often do not report to the other major credit reporting agencies. For that reason, the consumer information held in your Teletrack file does not appear on many other credit reports.
While payday loan companies often use Teletrack, it is important to note that the company has no direct interest in or control over the payday loan industry. Teletrack never approves or denies any requests for credit, and makes no recommendations to the lender as to whether to take any action on a loan application.
It should be pointed out that payday borrowers who successfully meet their loan obligations are typically rated favorably within the Teletrack system. To that extent, Teletrack also serves to identify positive credit risks to payday loan companies as well.
Chances are, your payday loan will not be automatically denied, even if your Teletrack rating is unfavorable. Payday loan providers normally use Teletrack to determine the overall risk in extending a loan, and will use that risk assessment to calculate an appropriate interest rate for your loan.
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