How long until Payday loans leave credit history?

ostft

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Hi,

Due to my own financial ineptitude over the last 2 years I have used Wonga.com 11 times, all of which show on my credit report. Every loan has been repaid in full and (almost every time) before the due date, I took these loans out in a misguided attempt to boost my credit rating fast. In hindsight it would have made sense to research first, but what is done is done. I am young and a high earner (around £70,000 per year) and my bank refused to give me a credit card with a limit over £1,000 so I tried to cheat my way into good credit. I have good credit now (experian etc. report my score as being over 950) but obviously in reality every lender is going to see the payday loans and assume I'm a financial mess.

Anyway, I was stupid, my question: How long until the items "disappear" from my credit report. They are all "in good standing" so I don't think the 7 years applies to this as it does adverse credit; how long until "good" items drop off? Or do they not drop off at all?

Wutang_2

6 years - and you do NOT have good credit now.

ostft

Thanks for the info. woops.

consumerism wrote: »

As a lender they should also be worrying that you're a high earner on £70,000 yet need a PDL. Alarm bells are a ringing young man

As I stated in my post.

Wutang wrote: »

6 years - and you do NOT have good credit now.

As I stated in my post.

BugsyBrowne

£5600 a month and using PDL's anyone smell something I can b...ul..... l...sh..it.

ostft

I don't understand what's unlikely about my situation, not that it matters as my question has been answered. I am young (and was stupid in regards to finances) and I have a very well paying job, 2 years ago I wanted a credit card with a reasonable limit so I could take advantage of the protections they provide, benefits and rewards, unfortunately my bank refused my requests for a limit raise (and rejected appeals too and refused to explain why) so in a moment of fiscal genius and impatience I decided that if I can't get a higher credit limit I will take credit and repay it and build up a good credit rating, as that's how credit ratings work (in theory).

I don't need pay day loans to live nor do I rely on them and I no longer use them after I discovered my plan was flawed. I have more than enough cash to buy whatever I want, however I was under the (mistaken) assumption that credit ratings were an important part of life, so starting with a credit card early (even if it was un-needed, as in my case) was a good idea, because you can show in 5 years that you have paid things off, unfortunately I took that one step further and figured if I can't get higher credit with my bank I can cheat! Thus my problem above.

I recently applied for a card with a new bank (with a £20k limit) and was approved, during that process I decided to investigate all about credit and that's when my realisation from above came to light.

If you don't believe my story (why?) then whatever, my bank can clearly see I am not lying about my income as can HMR&C (who sure love to take £20k from my account every year).

Thanks for the info.

Gordon_Hose

It goes to show intelligence isn't linked to common sense.

So your bank offered you a credit card with a limit of £1000, but you turned that down and took out multiple smaller PDL's?

Why wouldn't you take the credit card, use it, and pay it off in full each month? What part of you thought PDL's were a credible way of building GOOD credit history??

You're either extremely stupid or you're a troll. I definitely smell BS.

freshstart11

if you had looked in to it so much, then you wouldnt need to ask the question!

And it was answered straight away - good/bad credit it doesnt matter it is 6 years

ostft

Gordon_Hose wrote: »

It goes to show intelligence isn't linked to common sense.

So your bank offered you a credit card with a limit of £1000, but you turned that down and took out multiple smaller PDL's?

Why wouldn't you take the credit card, use it, and pay it off in full each month? What part of you thought PDL's were a credible way of building GOOD credit history??

You're either extremely stupid or you're a troll. I definitely smell BS.

2 years ago I got a good paying job (£70,000/year) and it was my first real job (at this point I had no savings so we can assume I was at £0)

After my first payslip I applied for a credit card with the bank I have used since I was 14 (HSBC) and I was approved for (what they said was) their lowest limit credit card (£425).

For the next 6 months I would make some of my monthly spending on that card, on average I spent £350 per month on the card and I would repay the entire balance on the day that the balance was due (the statement was available in online banking)

After 6 months (6 successful repayments) I had the option in the online banking interface to apply for an increase in my limit, I applied and was instantly rejected. I phoned HSBC and was told that I could appeal, so I asked to appeal and they told me I would get a final decision via post. I waited and around a week later I got a letter confirming that my appeal had been rejected.

At this point I was annoyed, I wanted a higher limit credit card for the freedom to spend larger amounts (for example at the time I wanted to purchase a new guitar for £1200 online and I wanted the protection of buying it with a credit card) so I figured if I can't get my bank to raise my limit maybe I can take out a loan and "cheat" my way into higher credit. I had seen a few wonga.com adverts on TV and had no idea how Payday loans worked, so I looked and saw people complain that they were a scam but after looking into it more it seemed as long as you kept on top of the repayments they were fine.

I took out a loan from Wonga, I waited a few days and then repaid it in full. I did this maybe 3 or 4 times over the next few months and then applied for a credit raise with the bank again, once again I was rejected, appealed and appeal rejected. At this point I should have thought that maybe 6 months for the initial request was too little time and maybe the pay day loans was hurting my credit eligibility, but I didn't, I thought I needed to cheat more.

Over the next 8 months I took out more loans with Wonga and repaid them all within 7 days, keeping my total credit owed at £0 (I continued to pay my credit card back during this time), this brings me to around 6 months ago where I once again got rejected for a credit card raise. At this point I decided to make sure I knew what I was doing and at this point discovered I was an idiot.

I don't understand what is hard to believe about what I did:

I thought all credit was bad, I was brought up (and educated) to believe that credit = bad, if you have a credit card you're doing finances poorly and will end up in debt, so when I discovered that having credit is GOOD as long as you manage it I accepted this complete change in my understanding of credit as gospel and assumed it extended to all credit, obviously it does not.

Yes I was an idiot and I'm going to end up paying for this in my inability to gain credit over the next 6 years (although I did recently get approved for a good credit card with another bank, no idea how) however I am financially secure and no matter what you choose to believe I can honestly say that my "story" is legitimate.

I came here for information, not to be told I'm lying. Finances are such a small part of my life (I'm financially secure, I don't have to worry about money at all) and so I treated my approach without the caution it needed. I'm an idiot, I get it.

ostft

consumerism wrote: »

If you earn £70k then HMRC will take around £1500 per month. How do I know? Because I actually do earn that (with bonus).

I earn "around £70k", my actual income (as listed in my contract) is £74,500 (before bonuses, but I put them straight into savings and don't consider them "income" for the purposes of my finances as they're not guaranteed). I'm not sure what your point is there, does just over £19,000 a year not qualify as being £20,000 for the purposes of rounding?

consumerism wrote: »

I can't even get a £20k limit on a card and I have a long and established employment history and own my house.

No way do you have a £20k card limit. Sorry.

Then I have no idea how I did, but I did. Maybe this bank is weird about their approval process, I don't have the card in my hand so maybe I have counted my chickens however I have a letter confirming the card is being posted to me. I don't see how this matters.

CLAPTON

I'm not quite sure what you mean when you say you paid your CC when the 'balance was due'

if you pay a CC before the statement is actually created then the balance will be zero and it will look (in your credit files) as if the card isn't being used

however that may not be the case here.

what exactly do your credit file show?

ostft

CLAPTON wrote: »

I'm not quite sure what you mean when you say you paid your CC when the 'balance was due'

if you pay a CC before the statement is actually created then the balance will be zero and it will look (in your credit files) as if the card isn't being used

however that may not be the case here.

what exactly do your credit file show?

My payment due date was the 22nd of the month, what I spent between the 22nd of the previous month and the 21st of the current month would show and I would pay all the items and my balance would return to 0 -- although on one occasion I repaid too much and I had a positive balance.

Example: June 25th I spend £100 on my credit card, June 28th I spend £60 on my credit card, July 15th I spend £150 on my credit card. June 22nd my statement shows that I owe £310 and I must make minimum payment within a time limit, I would pay the £310 and then my balance would show £0 again.

My experian credit report shows for the credit card:

Account type: Credit card
Credit limit: £425
Current Balance: £220

It shows that it last updated on the 6th of May so that's why I have a balance that I owe, it was what I spent in the 2 weeks prior.

Then below that it shows "Account Status Details (1 - 12 months)" with the last 12 months listed. Each one shows "Status Code" with a green circle (the key lists this as "Payments made and up to date"), then below that it shows the same but with 13 - 24 months, all green too.

Then it also lists all the Wonga loans, all of which show a green circle ("Payments made and up to date") with the "Current Balance" as "Settled".