Payday Loans - BBC News Segment

izools

MichaelCR wrote: »

'Term 2 Months' Gives it away though.

Cor you guys really have some weird ideas about credit scoring and underwriting.

Account types don't negatively affect credit worthiness if the account is run OK and since settled.

Account terms don't negatively affect credit worthiness.

If underwriters made the assumptions and determinations you think they did, they would be massively in breach of the Data Protection Act.

Don't get me wrong, I am far from a proponent of Pay Day Loans, they are seriously scummy products, but that doesn't negate the fact that a pay day loan paid off on time won't have a negative effect on credit worthiness.

And if you are of the mindset "The proof is in the pudding", then why was my OH just approved for two prime credit cards no questions asked? Despite having 3x PDLs from March this year on his credit file?

Fishingtime

Obviously you don't need the money that bad as it has been 5 or 6 days since your original post,and you still haven't taken out the loan.

Or did you just put up the post for other reasons?

Apples2

izools wrote: »

portraying myth as truth, Mr Apples2, sir :beer:

I don't dispute your claims, you have more practical experience of these loans than I.

My claims are based on anecdotal evidence on these forums where people have taken advantage of Payday loans for the Quidco cashback only to find a rejection when applying for further credit.
Following appeal an otherwise unblemished history has an entry of "Salary Advance", this has been given as a reason for a decline.

Wether it be right or wrong, I know for a fact, I will not have a loan from ANY PDL company even if I can double my money.
Aslo consider they don't all report the entries, there seems to be no regulation so in your instance Payday Express have entered the application as "Personal Loan", but others may not.

izools

Indeed, you are correct in so much as there is little regulation, the loans could be categorized as personal loan or salary advance, as they kind of fit both descriptions.

I would however suggest that no underwriter would ever state in black and white that "An entry of salary advance was noted in your credit history, therefore we have been unable to offer the facility you have applied for" or some such. They'd undoubtedly advise that the decline was to do with credit scoring but to single out a well run account, whether or not it is a pay day loan account, would be using the data unfairly and therefore be a breach of the DPA 1998.

But whatever, PDLs are sin incarnate, be damned with them whether or not they negatively affect credit :beer: