The fair rate financing, we are often asked if we carry out credit checks in the funding process. The answer to this question is "no." However, there are other "control" is commonly used by loan companies to assist in trial subscription. This post will discuss this in detail a little more.

Credit control

Credit checks used by lenders to assess the likelihood of repayment of the loan and the conditions of the loan later. Lawsuit funding is not technically a loan, because if the cause is not successful, a cash advance is not refundable. Instead, buy one of the sponsors of the event proceeds, if any. Therefore, a credit applicant is a non-issue and the credit score is usually not a factor in the process of signing. However, the background of the applicant may be a problem, and is considered the decision to fund a special case.

Background checks

When a case is presented to the cashier continued progress, the subscriber must evaluate all relevant facts. Since the lawsuit loan is not paid unless the case is ultimately successful, the funding trial subscribers against a tough challenge as they must base their decision on a limited amount of information. In fact, thousands of cases each week are funded on the basis of a few pieces of paper (the police report, for example, records of information security and medical care) and a phone call to the prosecutor's office .

The little information of subscribers to be used for the moment. A piece of information is the applicant's file.

Loan companies generally use pre-law background checks when a case is approved for funding. Normally required funding trial, want to see if there are other potential mortgage holders would be in a priority position in question. Examples include federal tax liens or child support obligations.

In some cases, however, a background check can be used as part of the approval process. For example, if a case is approved but the applicant's background check shows a history of fraud, subscribers seriously consider this fact when deciding to offer a cash advance. Worst case, the applicant may be perpetrated a fraud. At best, their past transgressions go to his credibility as a truthful witness in this case.

Most background checks are just minor offenses and / or civil judgments. In most circumstances, background checks do not disqualify a matter of funding. But, as mentioned above, the presence of federal tax liens or child support obligations throw a wrench in the funding process of trial.

When theses situations, all hope is not lost, as it can take action to remedy the situation. For example, just because a tax lien or other priority ratings are listed in an information report does not necessarily mean a constraint valid. Often, these are obligations, such as current or less satisfied, but it is not updated on a background check. In other cases, a common name can generate a number of mutual support of research, but until further research can be a lien must be verified or is considered an error.

As noted above, a lawsuit funding companies use many tools to more accurately assess the risk associated with cash advances against future revenue pending lawsuit. Even if the credit scores of applicants usually do not have any real meaning, do basic checks on their part of the subscription process.