WARNING- Pay day loans

bargainbetty

If you believe everything that is written on websites, then I have your winning lottery ticket here, and you only need to pay me £250 via Western Union for postage. Sorry, that was facetious, but you take my point?

Unfortunately, the old rules about managing debt (whatever debt) being a good thing have changed, just like the rules on how easy it is to get a consolidation loan now etc. You used to be pratically begged to do it, but now if your total debt plus the loan is more than half your income, even if you truly intend to pay down the old debt, you will struggle. Now, they look at the total sum and type of debt you have, and consider whether or not your overall use of debt makes you a good risk. PDL are short-term debt for when you cannot manage your income. This is not a good thing.

Sorry that you don't like it, but everyone is pointing out the truth.

bigadaj

I don't buy this, can't see why a sungle payday loan would leadbto a mortgage rejection. There must be other problems with your credit history, a single payday loan won't destroy your credit file, same as a single missed payment etc won't do.

bigadaj

BugsyBrowne wrote: »

Think this post is inappropriate TBH.

Bugsy, you developing a conscience?

bankhater_1965

bigadaj wrote: »

I don't buy this, can't see why a sungle payday loan would leadbto a mortgage rejection. There must be other problems with your credit history, a single payday loan won't destroy your credit file, same as a single missed payment etc won't do.

no one is saying a pdl will destroy your credit rating , but it tells a creditor that you cannot manage your day to day spending etc and because of that , you are a higher risk for a loan or whatever else credit

Buzby

Since the bulk of credit searches are automated (they scan and look for defaults and low scores on delayed payments), they have no 'intelligence' to work out which is a nice loan or what is a suspect one (ie, a PDL).

The OP's comment confuses me - yes, the loan will be shown on his file, but if he didn't default, then there is no black (or grey) mark on his file to cause problems later. A paid off PDL is a plus point - the reasons could be wide and varied why itr was required (illness, emergency) so flagging this as mismanagement is nonsensical, and I doubt this happens.

iaintw

mostly payday loans are on callcredit and not in equifax and experian
just letting you know this

Wutang_2

Buzby wrote: »

A paid off PDL is a plus point

There is no way this could ever be correct. PDL = desperation

Mara69

iaintw wrote: »

mostly payday loans are on callcredit and not in equifax and experian
just letting you know this

Not true.

Blah, blah, blah

Cell

DCFC79 wrote: »

Its clear using PDL's can have a negative effect on a credit report, it just shows people can't budget accordingly. If your having to resort to a PDL then you muct be spending more than what you have coming in, its simple maths.

Partly, but not totally. If someone borrows £200 on a PDL and someone else shoves that on their credit card and both are paid off in say two months they've both done the same thing, just in a different way. I don't think a brief increase in CC borrowing would have much of an effect. It may even be viewed as managing finances sensibly.

Most people come across times when for a while those maths you mention don't add up.

The real issue, as touched upon elsewhere, is why a PDL compared to a credit card? Presumably because someone doesn't have a credit card or because they're maxed out. Both would trouble a mainstream lender.

Mortgages usually get far more personal attention to detail from lenders than CCs and loans. Therefore, on the basis of the brief details available, it's the overall credit record which is probably of concern and the PDL is a symptom, not a cause.

DCFC79

Cell wrote: »

Partly, but not totally. If someone borrows £200 on a PDL and someone else shoves that on their credit card and both are paid off in say two months they've both done the same thing, just in a different way. I don't think a brief increase in CC borrowing would have much of an effect. It may even be viewed as managing finances sensibly.

Most people come across times when for a while those maths you mention don't add up.

The real issue, as touched upon elsewhere, is why a PDL compared to a credit card? Presumably because someone doesn't have a credit card or because they're maxed out. Both would trouble a mainstream lender.

Mortgages usually get far more personal attention to detail from lenders than CCs and loans. Therefore, on the basis of the brief details available, it's the overall credit record which is probably of concern and the PDL is a symptom, not a cause.

Yes i agree with your example, the problem occurs when its multiple entries for PDL's, if its just the 1 then is it much of a problem.

Yes some will choose a PDL over a CC and thats when they really need to look at the finances and stop spending as much.