While there are three major credit bureaus in America, they are not the only sources for credit scores. In addition to Equifax, TransUnion, and Experian, there are many other credit reporting agencies. Among them is Teletrack. Originally owned by CoreLogic, Teletrack has been a division of Equifax since 2021.
This article will give you some background information on Teletrack—what it is and how it works. Additionally, we’ll look at how your creditworthiness is determined and the real lending options for those with a good or bad credit history.
What is a Credit Score?
Your credit score is a rating of your overall creditworthiness. Credit scores range from 300 to 850:
300-579: Poor/Bad Credit
580-669: Fair Credit
670-739: Good Credit
740-799: Very Good Credit
800-850: Excellent Credit
Credit scores depend on the contents of your credit report. A credit report records your relationships with your lenders and creditors. Credit reports keep track of five different aspects of your financial behavior. Each aspect has a specific impact on your credit score.
Payment history is the record of your late and delinquent payments on any bills, line of credit, or loans. Your payment history can give a potential lender a clear idea of how good you are at paying your bills. For that reason, payment history has the most weight on your credit score.
Credit utilization is the second most important determining factor of your credit score. For the average consumer, credit utilization is another way to look at your credit card debt. Your utilization is expressed as a percentage. So, if you have a $1,000 balance on a credit card with a limit of $4,000:
Balance/Limit = $1,000/$4,000 = .25 = 25%
Your credit utilization is 25%. Your utilization shows lenders how regularly you pay down debt. Overall, utilization should reflect a balance of activity between credit usage and payment.
Credit history is the age of your oldest active account. For example, if you’ve had a credit card since 2016, then your credit history—or credit age—is six years. Your credit history can be an indicator of your experience with managing debt. However, credit history benefits you only if it supports a good payment history and utilization.
New credit records hard inquiries into your credit report. A hard inquiry is an action a lender takes to review your full credit report. A hard inquiry for a loan application is a more detailed credit check than a soft inquiry, which only checks your credit score to determine preapproval for financing.
Your credit mix refers to the different types of credit you manage. If you’re paying on student loans and a credit card, you have a credit mix. Because these loans have different repayment structures, your ability to keep them current speaks to your ability to handle more debt.
How Credit Scores Are Calculated
A credit bureau is a credit reporting agency that compiles reports and calculates credit scores. Credit bureaus do this work with the help of proprietary credit score algorithms. Every bureau has its standards for credit rating, so any consumer can have multiple credit scores that slightly vary.
What is Teletrack?
Like the major credit bureaus, Teletrack is a consumer reporting agency that provides information to businesses that offer loans and lines of credit. Teletrack specializes in analyzing people’s financial behavior that, by the traditional lending standards, would be considered a bad credit risk to banks and credit unions. Some of these high-risk people suffer from bad credit histories. Others may be at the end of the spectrum and have no credit at all. Teletrack uses a credit scoring method based on other factors of a borrower’s financial situation to prove creditworthiness. The company also compiles and analyzes borrowers with multiple loans with the same lender or loans with different lenders. Teletrack reports provide loan fees, interest rates, borrower employment history, and credit payment habits.
Teletrack works with companies that typically deal with financing for bad credit borrowers. Companies like appliance or furniture stores, rent-to-own businesses, and mobile data carriers may use Teletrack to gain insight into potential customers’ ability to pay. Without the use of Teletrack, “traditional” bad credit would keep many people away from goods and services.
What Is in a Teletrack Report?
Like a credit report from a big credit bureau, a Teletrack report provides information on a consumer’s financial situation. But instead of your credit and debt, Teletrack looks at behavior that speaks to how you manage your debt. For example, a Teletrack report can contain a history of applications like payday loans, credit cards, and other lines of credit. While the bureaus look at hard inquiries, this report also considers a consumer’s soft inquires. These are simple credit checks that are routine for payday loans and credit cards.
Teletrack has a scoring system similar to the major credit bureaus. It is also a three-digit number calculated from the report’s data. However, Teletrack scores range from 200 to 800, with 800 the best score.
Teletrack vs. Credit Bureaus
When it comes to traditional creditworthiness, you either have a good credit score or a bad one. Your credit history is important to your score, so you need to spend time and effort drastically changing your habits to have a better score. On the other hand, your long-term credit-building goals don’t make your current needs any less important. People that need to finance life’s necessities (furniture, appliances, rent, etc.) need a way to assure short-term lenders. Teletrack provides the information about employment, income, and payment history lenders need.
What is a Payday Loan?
Payday loans are high-risk, short-term loans meant to cover expenses between a person’s paychecks. Payday lenders market them as loans for bad credit borrowers, as they don’t require a “credit check” or hard inquiry into your credit report. You can get a payday loan online or use a payday lender at a physical store. In either case, a payday loan application typically takes less than a day to process.
Teletrack and Payday Loans
Payday loan approval typically doesn’t depend on good credit or bad credit. Instead, payday lenders want to know if you have the means to repay the loan. For that reason, payday lenders use Teletrack scores. Teletrack’s data on a borrower’s past loan amounts, repayment history, and delinquency status is the type of information lenders need to make their decisions.
No Teletrack Payday Loans
In some cases, a payday lender won’t use Teletrack or any consumer reporting agency to run your credit. Instead, approval decisions for such loans depend on your employment and monthly income. These factors inform a payday lender whether or not you can repay your loan. Naturally, no Teletrack payday loans appeal to bad credit borrowers looking for instant loans.
Payday Loan Disadvantages
However, the convenience of getting a payday loan overshadows its cost. In addition to high rates and origination fees, the typical payday loan has a loan term of fewer than two weeks. Many people fail to pay off their loans when payday loans come due. Their balances roll into new loans with more interest and fees attached. The process repeats itself until your balance is zero. Payday lenders throw people into a debt trap with payday loans that take years to escape from. However, payday lenders have used dubious methods and clever marketing to hide payday loans’ real risks and costs. That’s why payday loans continue to be popular choices for people looking for fast cash loans online.
Why Installment loans Work
The popularity of payday loans keeps many people from understanding the advantages and savings of getting a personal installment loan. Installment loans can help you consolidate your credit card debt, help manage emergencies, or allow you to finance big purchases.
Here are some of the other advantages of getting a personal installment loan.
Installment Loans Are Unsecured Loans
It sounds weird to think of something “unsecured” as a safe bet. However, an unsecured loan doesn’t require you to put up collateral. That means you can get an installment loan without having to risk a valuable asset like your home, car, or savings account.
Installment Loans Are Simple To Manage
If approved, an installment loan comes to you in a lump sum that you repay in equal monthly installments. Every installment payment is a portion of your principal and the loan’s interest. Having regular payments that are the same amount makes them easier to fold into your monthly budget. When you know what kind of expenses to expect, you’ll be more prepared to pay them on time.
Installment Loans Are Convenient
With the arrival of online installment loans, access to installment loans is as easy as opening a laptop or picking up a mobile device. Generally speaking, applications for installment loans take just a few minutes to complete and only require a few pieces of personal information. Unlike the traditional loan applications that take weeks to process at a bank, many online installment loans typically deliver loan decisions within a business day. On the whole, online installment loans provide the speedy service of a payday loan with the stable structure of a personal loan. And if you feel plagued by bad credit, installment loans can also work for you.
Teletrack For Installment Loans
Teletrack is also used to help people with bad credit get approved for installment loans. Each lender has different requirements; some lenders may use traditional credit bureaus, Teletrack, or neither. Getting a no Teletrack loan is the safest bet for a person with bad credit, but loans that perform no credit check at all tend to have more restrictive terms and higher costs than those that do. Ultimately, each borrower has to make decisions for themselves, but any financial expert would advise considering long-term financial commitments to fix short-term money problems.
The Bottom Line
We hope this article has helped shed some light on your “What is Teletrack?” questions. However, what’s most important is that you better understand how your financial behavior affects your options for financial relief like installment loans. Whether used for a Teletrack payday loan or Teletrack installment loan, your creditworthiness will be a factor. So before the next time your bank account needs a boost with a loan, get in the habit of budgeting and using your available credit wisely.