Published: September 23, 2014




Payday lending companies, AKA salary loans, payday advance loans, or payroll loans have a lot of bad rap, and often deservedly so. Their practices have been deemed predatory, as they reel people in with an irresistible promise of quick cash and zero credit check, while often obscuring astronomical fees for their services.

However, since payday lending companies operate in a high-risk financial environment, their claims of no credit checks are often a misnomer. They do vet their prospective clients-just like banks and credit card companies-but since their clients either do not have a credit history or have a bad one, they use alternative agencies that deal with this kind of lending.

Clarity Services
Clarity Services is one of the largest alternative credit agencies that provide credit checks to payday companies. This is the only agency that doesn't shy away from using the word subprime. Or maybe, it's because consumers don't often go there.

Clarity Services, Inc. is a credit reporting agency that provides information to providers and develops efficient and effective data reporting products to help businesses reduce high-risk lending. Clarity's growing database provides information that is not available from traditional reporting agencies, and assists lenders in gaining a competitive advantage by viewing subprime consumer data.

DataX
Unlike Clarity Services, DataX avoids using the word subprime and their website has a very friendly interface with useful consumer information prominently displayed on the first page. They also avoid using the term credit agency, billing themselves an "information services provider".

DataX is an information services provider that provides insight into consumer payment history for the non-prime lending community. The information DataX provides does not help or hurt your credit as it is reported by the three traditional major credit bureaus.

Factor Trust
Aside from having a name that would better suit an aspiring rapper, Factor Trust also has the words "underbanked expert" in their subtitle. And they are a credit agency, alright!

Fifty-one million people are underbanked. They often have bank accounts and jobs with competitive salaries. Many are homeowners and have attended college but they operate outside the scope of traditional banks - preferring fast, easy ways to borrow. If you are a lender interested in serving this consumer segment, we would like to share our expertise on effective and intelligent management of the associated risk.

Fifty-one million, huh?

MicroBilt
This agency is kind of vague about what they are and what they do. I haven't found any trigger words, like subprime or underbanked in their mission statement. Nevertheless, MicroBilt is one of the companies that the lenders go to when they decide if they should extend you their 400% APR loan.

Teletrack
Teletrack is also a large alternative reporting agency, but they do not call themselves a credit agency. They are a data provider, and the reason I know this is that they say so themselves. Same difference?

As a full-service data provider, we support the risk assessment needs of payday loan providers, installment lenders, rental purchase companies and other consumer finance businesses serving consumers with less than perfect credit histories... We have the data you need to mitigate risk and make smart lending decisions because we process more than 10 million inquiries, scores, decisions and updates every month.

So here you have it, folks. If you think you might have been unfairly denied a loan due to some erroneous reports from one of these agencies, they must provide you with your credit report free of charge. Contact them and dispute the errors.

This is a post by Andy Shuman, a credit and travel expert who blogs at www.Lazytravelers.net. He writes and blogs during and between trips that he enjoys free of charge mostly due to creative use of credit card offers. He believes that credit cards are much more than just a convenient way to pay for a purchase, and that the benefits of responsible credit habits can go far beyond getting the best rates for loans and mortgages.

Andy is the author of bestselling books from Lazy Traveler Handbook Series available on Amazon. When he's not traveling, he lives with his beautiful wife and daughter in Brooklyn, NY.

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