Can't get anything, may as well just default!

Voyager2002

You are right to be annoyed.

At the moment most lenders regard even a well-managed payday loan as a danger sign. That is a matter of fashion, and could well change very quickly. What will not change is that defaults are a clear red flag.

rtho782

My credit rating will of course improve with time, especially as I pay down debt. I know that.

My issue here is not that lenders see PDLs in a negative light, nor that new PDLs show as such on my credit file.

My issue is with the retrospective nature of the change. Loans that previously accurately showed as "Loan", are now shown as "Payday Loan". Had this been the case at the time, I would not have taken out the products.

Had Experian decided to do this with all PDLs going forward, fine. Perhaps it would have been good to publicise the change, but nobody could really complain. It is the retrospective change I have issue with.

droiderm

But what does a "well managed pay day loan " imply about your financial management skills? From what I hear it's practically impossible not to pay them back, they even go to the trouble of taken money out of peoples accounts who didn't even take a loan!

I think you have to pretty desperate to take a pay day loan. And yet people are complaining at banks for seeing it for what it is. It doesn't bode your finances are in good shape at the time.

droiderm

rtho782 wrote: »

My issue is with the retrospective nature of the change. Loans that previously accurately showed as "Loan", are now shown as "Payday Loan". Had this been the case at the time, I would not have taken out the products.

Come on, enough is enough!
If you were in a situation where you needed one (it must have been desperate).than I will be suprised if that was a factor. I doubt many people take a PDL to get their hair done.

If I needed money that desperate, I would get it irrespective of what it was recorded as on my credit files.

rtho782

droiderm wrote: »

Come on, enough is enough!
If you were in a situation where you needed one (it must have been desperate).than I will be suprised if that was a factor. I doubt many people take a PDL to get their hair done.

If I needed money that desperate, I would get it irrespective of what it was recorded as on my credit files.

Not really.

My credit rating used to be awful, until mid 2011 I had a default on it, I had limited credit history. I took out one of the Cashplus cards to build my credit rating, I used a number of PDLs with cashback via quidco as it meant they were free or close to free and would show as repaid loans.

I guess there may have been one or two of the 12 or so that I would still have *needed* to take, but I would have avoided all or nearly all of them.

Still, I don't believe it is fair to make retrospective changes.

droiderm

Irrespective what they are called.
Wouldn't it be obvious that they were very short term ?

Experian_company_representative

I published an Experian Q&A on this earlier in the year. Not all lenders choose to see payday/short-term loans separately to other loans, certainly at the moment. Of those that do, the effect of this information on scoring will always depend on and vary by the lender.

James Jones

[Deleted User]

droiderm wrote: »

Irrespective what they are called.
Wouldn't it be obvious that they were very short term ?

A very good point. Even before the change in naming convention, it's unlikely any lenders thought a one month loan was a mortgage.

Niv

Personally I see payday loans as a red flag, it’s a precursor to a default imo. I am sure there are perfectly legitimate reasons out there to get one, but I still don’t see them in a positive way at all, at best I may be persuaded to consider them 'neutral' but I would be reluctant. However, I am not a bank or loan company so my opinion doesn’t really matter I guess J. Anyway good luck OP, I understand where your frustration is coming from and am glad that the ‘ may as well default’ line was in jest.

Niv

JimmyTheWig

rtho782 wrote: »

My credit rating used to be awful, until mid 2011 I had a default on it, I had limited credit history. I took out one of the Cashplus cards to build my credit rating, I used a number of PDLs with cashback via quidco as it meant they were free or close to free and would show as repaid loans.

Ok, so the question remains what made you think that this would help your credit rating?
Was it just something that you thought? (In which case, unfortunately, it appears to have been a bad decision.)
Or was it based on advertising from the PDL companies? In which case you may have a comeback on them?
Or was it from information from a credit reference agency, in which case it seems that they have gone back on what they told you.

I think that it is right to call them "loans" and it is right to call them "pay day loans". Unless you were told that they wouldn't be called "pay day loans" for the whole time they are on your credit file then I don't think that there is much the credit reference agency can do for you.
I think your only hope is that if the PDL company had told you it would help. Is that what happened?