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When You Get a Cash Advance, Do They Check Your Credit Score?

Written by
Alex Huntsberger
Alex Huntsberger is a personal finance writer who covered online lending, credit scores, and employment for OppU. His work has been cited by, Business Insider, and The Motley Fool.
Read time: 4 min
Updated on December 28, 2023
young woman in black t-shirt wondering when you get a cash advance, do they check your credit score?
Neither credit card cash advances nor cash advance loans require a credit check, but that doesn't mean they can't affect your credit score.

For people with not-so-great or flat out bad credit, applying for a loan or a credit card can be nerve-wracking. After all, applying for new credit gets added to your credit report, and it usually causes your score to decrease a little bit.

When your credit score is already hurting, the last thing you need is for it to drop any lower. And if you apply for a loan and are denied, you may end up with a lower score and nothing to show for it!

One option potential borrowers can explore is a cash advance; but will that lead to a credit check? How will a cash advance affect your credit score?

With a credit card cash advance, you use your card to withdraw cash.

There are two different types of loans that are called "cash advances." One is a credit card cash advance. This is a type of credit card transaction where you use your card to take out paper money and the amount you withdraw is then added to your total credit card balance.

The annual percentage rate (APR) for a credit card cash advance is usually much higher than the APR for a regular transaction, and credit card cash advances do not come with 30-day interest-free grace periods like regular transactions do. This means that the interest for cash advances starts accruing immediately.

Additionally, most credit card cash advances carry an additional fee for processing the transaction. The fee is often expressed as either a dollar amount or a smaller percentage of the amount withdrawn; for instance, $10 or 3% of the amount withdrawn, whichever is higher. All things considered, credit card cash advances are a much more expensive alternative to regular credit card use.

Some predatory loans advertise themselves as “cash advance loans.”

There are loans that may be advertised as "cash advance loans" but are not tied to a credit card. These loans are likely a subset of bad credit loans. They are financial products with short terms and high rates that are often very difficult for people to repay on time. Lenders that offer these products often stand to make more money from the customer rolling their loan over and entering a dangerous cycle of debt.

However, even though these two types of cash advances are very different, neither will likely involve a credit check.

With either type of cash advance, they will not check your credit.

No credit check is run when you take out a credit card cash advance. In fact, the transaction will not even show up on your credit report; it will just be represented as an increase in your total credit card balance.

As we mentioned earlier, most cash advance loans fall under the heading of “no credit check loans,” which, as the name states, means they do not involve a credit check. Lenders that offer loans like these usually do not report payment information to the credit bureaus, which means that your cash advance loan will not show up on your credit report.

When a lender runs a full check on your credit history, otherwise known as a “hard” credit check, it will slightly ding your score.

The effects of the hard check likely won’t last as long as other negative factors, but it’s always best if you can keep your score from lowering, even if it’s just a temporary “ding.”

There are two ways that a cash advance could affect your credit score.

Now, the only way that a credit card cash advance will affect your credit is if you take out a series of large cash advances and add so much money to your balance that it starts to affect the “amounts owed” component of your credit score.

Your credit score takes into account your “credit utilization ratio,” which measures how much of your total limit you’re spending. If you had a total credit card limit of $10,000 and a balance of $3,000, your credit utilization ratio would be 30%.

In fact, 30% is the ratio that you should aim to stay below. Above that, and you’ll start seeing your score be negatively affected. Luckily, it will probably take quite a few cash advances to push your balance above 30%, so this probably isn’t something you’ll have to worry about.

A cash advance loan, on the other hand, could affect your score if you fail to pay it back. In a situation like that, the lender will probably sell the debt to a collections agency, who will then report it to the credit bureau. Once that collections account is on your report, your score will likely be seriously impacted.

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