What is the effect of payday Loans on credit file?

Hairymonster

Hi,

I used to be a regular user of payday loans; never got in any real mess with them as never missed a payment with them and found them convenient at the time. I understand they are exorbitant and have since stopped using them completely and starting to get my life back on track.

BUT what I want to know is what is the effect of them on your credit score/file if you constantly pay them on time? They all show up on my noddle file and show as settled.

I have heard some people say they can bring your score down(as creditors see you are using expensive short term borrowing quite a lot). But I have also heard they can help build your file as it shows you are reliable in settling the account.

I don't plan on taking any of these types of loans out ever again but just want to know what effect it has likely had on my credit file?

[Deleted User]

The general wisdom is that is has a good effect if your credit history is rubbish, and a negative one if your history is good.

It shows you can pay back a debt, but it also shows you can't manage your money in the first place.

KingElvis

Opinions are mixed on this but it's obvious they will count against you in any credit application because they show poor budgeting, living beyond your means and that you're desperate...sad but true.

Some people say they make no difference but I would bet you a pony they jolly well do.

Like all things, as they get older, they mean much less.

[Deleted User]

KingElvis wrote: »

Like all things, as they get older, they mean much less.

Like my kids....

Hairymonster

Ok thanks that makes sense; I'll just be staying clear of them from now on anyway

chanz4

I would ask those that say it has an effect to prove it, I have a very good file with no nastys or lates. I took a paydayuk loan out for the quidco cashback.

I have zero problems with getting cards, at good rates.

bigadaj

Like anything this should have a relative effect ie one payday loan which is paid back will have little or no effect, a number and particularly any not paid, extended etc and there will be a negative marker. Personally wouldn't risk it for the quidco cash back but that's a personal preference.

KingElvis

chanz4 wrote: »

I would ask those that say it has an effect to prove it, I have a very good file with no nastys or lates. I took a paydayuk loan out for the quidco cashback.

I have zero problems with getting cards, at good rates.

There's no way I'd trash my credit history for the sake of a few pounds cashback but I suppose we're all different.