Are "Any Credit Accepted" Loans A Scam?

Written by Matthew Taylor
Fact-checked by Caitlin Wood

Are “Any Credit Accepted” Loans a Scam?

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Credit scores are important. This number shows lenders, landlords, service providers, and insurers whether or not a consumer will make their payments on time. Typically, the higher a credit score is, the better an individual is at paying off their debts. Although keep in mind that, your credit is just one piece of the puzzle. Lenders, creditors, etc, look at a variety of factors when deciding to approve you for a new service or product.

Those with no credit score or a bad credit score can still access credit, but lenders may view them more cautiously. Lenders compensate for the potential risk offered by these borrowers by charging higher interest rates on the credit they offer. Banks and other traditional financial institutions may refuse to loan to those who have no credit score or a bad credit score, so these borrowers must turn to alternative lenders – who claim to accept “any credit” for a loan.

Are “Any Credit Accepted” Loans Real?

“Any credit accepted” loans are real. They are not a scam. These loans are issued by nontraditional lenders to people who have no credit, little credit, or bad credit. Although these lenders may still review your credit history, they usually won’t make a decision to issue you a loan purely based on your credit score.

Even if these lenders do not make a decision purely based on your credit, they will often look at other financial factors to determine your eligibility for the loan:

Income and Expenses

You are more likely to be approved for an “any credit accepted” loan if you have a good income. Lenders will view you as someone who can pay the required loan payments every month.

Of course, your high income doesn’t matter if you have high expenses too. Your debt-to-income ratio, which compares your expenses to your income, matters to lenders.

Employment History and Stability

If you have stable employment, that shows lenders that you can consistently pay the loan’s monthly payments. If your employment history is less stable, the lender might still approve you for the loan but may charge you a higher interest rate.

Collateral

Secured loans can be a good option for consumers who are struggling to get approved for the loan they need. Certain lenders will accept an asset (typically a vehicle or something of value) as collateral. While secured loans do come with some risk, you may lose your asset if you default on your loan, they can help increase approval chances.

Loan Details

You are more likely to be approved for a loan if the amount is low and the term is short. You are viewed as less of a risk to the lender because you have to pay a smaller amount and because you have to pay the loan off quickly.

You may still be approved for an “any credit accepted” loan if the lender does not look favourably on these financial factors, but the loan’s interest rate will typically be higher.

Additional Reading

Advantages and Disadvantages of “Any Credit Accepted” Loans

Like any kind of loan, “any credit accepted” loans have their advantages and disadvantages.

Advantages

Easily Accessible – You are almost guaranteed to be approved for an “any credit accepted” loan no matter your credit.
Convenient – “Any credit accepted” loans are convenient because you can get the whole process, from applying to being funded, done online.
Helps Build Credit – Like any loan, “any credit accepted” loans can help to build your credit if your lender reports to a credit bureau and if you make your payments on time.
Simpler Underwriting Process – “Any credit accepted” loans take only minutes to approve, and you can receive your funds the same day.

Disadvantages

More Expensive – Because almost anyone can get approved for these loans, lenders often compensate for the risk by offering higher interest rates.
More Likely to See Scams and Predatory Lenders – These loans have become more heavily regulated in the past few years, but scammers and predatory lenders are still out there. These types of predatory lenders often try to charge hidden fees and extra costs on top of high-interest rates and try to push their ”loans” onto unsuspecting borrowers.

Bottom Line

Although “any credit accepted” loans are not a scam, there are times when they should still be viewed with suspicion. Lenders often charge high-interest rates because of the potential risk that borrowers with low credit may pose.

It’s always a good idea to try to get approved for a loan by a bank or other traditional financial institution first, as they offer more competitive rates. If they don’t approve you, make sure to do your due diligence on any lender offering “any credit accepted” loans. Compare the interest rates offered by these lenders, read reviews about these lenders, and carefully read the terms and conditions of the loan so that you are not stuck paying a lot more than you thought. If you do your due diligence, you can protect yourself from predatory lenders.