Pawn shops do run background checks, but the process is not as thorough as the one conducted by a lender.

Lenders conduct two types of background checks: hard and soft. Hard checks include criminal history, work history and credit reports. Soft checks include social media activity, Google searches and driving records. Lenders may also require you to provide fingerprints in certain instances to check for criminal activity.

Pawn shops use hard checks only when they accept a loan contract on an item they are offering for sale. They may also check your credit report if they are unsure whether they can sell your item at retail value or if they want to determine how much they can offer you for it. If a pawn shop accepts your item for collateral on a loan contract, it will likely require that you have good credit in order to get approved for the loan amount requested.

If you are paying off an existing loan with cash at a pawn shop, then it may do soft checks on you as well as hard checks on the items being pawned. The reason is that some people try to sell stolen goods at pawn shops in order to get cash quickly so that they can leave town before police catch up with them.

Last modified: October 29, 2022