Do Payday Loans Affect Your Credit?

There are definite pros and cons with find cash advance and payday loans online. You can get the cash quick and easy, even with bad credit. The problem is that payday loans don’t have much of an affect on your credit score.

Payday loans don’t operate like normal loans, they are typically one installment (i.e. you pay the whole thing back your next paycheck) and using them doesn’t really reflect your credit worthiness. The only way they get reported to credit agencies if you somehow don’t make good on the payday loans. The payday lending practices tend to make this hard, as they often have a post dated check from you or an electronic funds transfer authorizations on file for you.

Payday loans are usually for people in bad credit situations with a very bad credit score range. They may get you out of a financial hot spot, but you can not improve your credit with them. If possible you want to look for ways to improve your credit, they way you can prevent yourself from ever needing payday loans. If you have a good credit history you can apply for credit cards and use them as cushion for when life doesn’t quick go your way.

Actually payday loans can affect your credit negatively in a non direct way. You see when you take a payday loan for say $200, you are probably going to have $260 taken out of your next paycheck. I don’t know about you, but that is a large amount of money to be ‘missing’ from your paycheck and may set you back on other bills which late payments on those can affect your credit score in a negative way.

If want to know more about how to improve your credit score, you should set aside time to speak with someone at your bank, they can often provide you with unbiased guidance how to improve your credit rating.

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