Picture this scenario. You need some cash fast. Unfortunately you either have no credit score or a bad credit score, from a limited history or uncertain payments in the past. How do you get a personal loan in today’s world?
There’s actually more options for you than you think. In this article, we’ll outline a few options, especially pawn shops. Because you have landed on our company blog, we will be obliged to suggest this as an alternative to an installment, payday, or “personal” loan. Pawn shops are great because they don’t check credit, they don’t report back to credit agencies, and they can’t slap you with years of fees like other person loan providers.
But before we sell you on that, we’ll offer some insight first first, you first need to understand what a credit score is.
A credit score or a credit rating is a simple scale for each person dictating how likely that person is to pay back a loan. The score ranges from 300-850. Anything less than a 630 means it will be hard for you to find a loan. If your score is above 720, you will find it much easier to find a loan. In between 630 and 720 is a mid range where you can probably find a loan albeit with higher interest.
Your credit score is determined by a few factors.
Do you pay your bills and loans and credit cards on time?
How high is your credit card limit and how much of it have you used?
How old are you lines of credit? This includes loans and credit cards.
Have you declared bankruptcy?
How many types of credit do you use?
Have you made an account inquiry lately?
If you have had a few credit cards for over 10 years, pay off your loans on time, and don’t rack up high amounts on your credit cards, you probably have a very high credit score and you can easily find a loan. The account inquiry part is a little more complicated. Basically, your credit score goes down a few points if you make a bunch of account inquiries, because the credit tracker companies will assume you are having problems or need a loan soon.
You could have a bad credit rating because you have never taken out loans.
Whenever you borrow money from a bank, credit union, installment or payday lender, they need to know that you’ll pay back the loan. Your credit score merely lets them know that you have paid back loans in the past. Most lenders like to see that you have paid back your debts.
You are allowed one free check a year by law of your credit score from each of the three main credit accounting companies-Equifax, Transunion, and Experian. Simply go to their website and ask for a credit report.
You can also use a credit score tracking app on your phone. You can find one here.
If you are going to a bank to get a small business loan or a mortgage, they will perform a credit check on you. If you apply for a credit card, the credit card supplier will do a credit check on you. If you are applying for a payday loan, the payday lender will do a credit check on you. If you want to rent a room in a house or set up utilities for your home, sometimes the company will do a credit check on you too. Guess who doesn’t need a credit check? Yes, pawn shops, because they’re going to collateralize your loan with an item.
Yes! I know all of this seems like doom and gloom if your credit rating is non-existant or below 630, but you are in luck. You can take out loans if your credit rating is below optimal.
Your credit score is merely a proxy for showing how likely you are to repay loans that you have taken out. If you can show a lender that you can pay back the loan, you can get a loan.
If you have proof of income you can take out a loan. Show your pay stubs to a lender and you can get a loan. If you own a house, or a vehicle you can put a lien on it and get a loan. You have shown that you have something of value and can get a loan on it.
You can also get a loan on personal property at a pawn shop. You can take in a valuable item to a pawn shop and get money the same day. Pawn shops do not check your credit score, they merely check the value of your item and give you a loan based off of the item’s value. If you do not pay back the loan, the loan will not affect your credit score, and the worst that will happen is that the pawn shop will take your item. 85% of pawn loans are paid back, and most pawn shops are flexible and willing to adjust your terms to help you get your goods back.
You have 2 main options at a pawn shop when you bring in your item. You can pawn or sell. If you sell your item, you walk away with money and never have to pay back a loan. However, the pawn shop gets to keep your item. If you pawn an item at a pawn shop, you get a short term loan, and have to repay the loan over a few months, with each payment usually on the 1st of the month. You will get more money if you sell your item than if you pawn it, but you won’t be able to get your item back if you sell it.
If you choose to pawn your item, the pawn shop will give you a pawn ticket that says the item belongs to you. Keep the ticket, repay the loan, and you will get your item back.
Pawn shops value firearms, jewelry, luxury watches, and designer handbags the highest. These items last the longest, have the least decline in value, and are in high demand in the marketplace. Pawn shops actually value firearms the most.
If you have another item that has high value, low depreciation, and have a high market value, pawn shops will give you lots of cash for it.
After firearms, jewelry, luxury watches, and designer handbags, pawn shops like
Before you bring an item into a pawn shop, make sure you clean it thoroughly. Pawn shops want to know that they can resell your item if they need to. They can’t resell a dirty item.
Make sure your item works. Pawn shops cannot resell broken TVs. Pawn shops do not have space for broken TVs or other electronics. However, for jewelry, if you have half of a necklace or a ring that is missing a few pieces, you item is worth at least the materials it is made out of. A gold ring is still worth the value of the gold it is made from.
Make sure you have all the component pieces. If you are bringing in an iPhone, make sure you have the iPhone charger. If you are bringing in a TV, bring in the TV remote and stand.
PawnGuru is a website service that connects people who want to pawn or sell their item to local pawn shops.
If you want to pawn or sell an item you own, simply submit your item to the platform. Shops in your area will be notified and will bid on your item. You usually get a bid within the first 24 hours. If you accept a bid on your item, simply drive over to the pawn shop with your item and pawn or sell it.
Not all pawn shops are identical. Pawn shops are radically different from each other. Some pawn shops specialize in high end jewelry, some pawn shops specialize in TVs, some pawn shops specialize in firearms. Different pawn shops are good at moving different goods. The pawn shop that specializes in TVs is very good at moving TVs and people in the area know that the best place to buy a TV is at the TV pawn shop. The TV pawn shop will give you a higher price for your TV, but might not know jewelry as well. The best place for your item is at the pawn shop that specializes in your item.
But how would you know which pawn shop to bring your item to? Well, PawnGuru has you covered there. When you submit your item online, the pawn shops in your area are notified. They will bid on your item, and the pawn shop that wants your item and specializes in your item will reach out to you. You will get the highest price for your loan. You don’t want to risk it, the loan and price difference among pawn shops averages 258%.