Payday loan affect on your credit file help !!

in Credit File & Ratings
23 replies 10.8K views
I am new here and looking for some helpful advice. I have had a pay day loan a few times from payday express. Always paid back on time no issues. I have settled what I owe them in full this month and will not be taking another one again ever !!

Now what I want to know is when a company ie Tesco bank, nationwide etc do a credit search on you for a loan, and they give you a decision in seconds ( I know not in every case). Do they just get the credit score generated to them by the Experian etc. Or do they look at every detail and see payday loans and run a mile.

Im looking in August to get a car loan and feel I have destroyed my credit file by doing this. Has anyone even used payday loans and been ok to obtain decent credit?

Im fine for cash now, lots happened all at once the past few months one thing after another, that's the only reason I used them, due to speed and being easy.

Any advice would be great as im really wondering how this works. If every company go through your file or do they just get a score and accept or decline based on that and the details on your app?

Thanks in advance
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Replies

  • DCFC79DCFC79 Forumite
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    gman2013 wrote: »
    I am new here and looking for some helpful advice. I have had a pay day loan a few times from payday express. Always paid back on time no issues. I have settled what I owe them in full this month and will not be taking another one again ever !!

    Now what I want to know is when a company ie Tesco bank, nationwide etc do a credit search on you for a loan, and they give you a decision in seconds ( I know not in every case). Do they just get the credit score generated to them by the Experian etc. Or do they look at every detail and see payday loans and run a mile.

    Im looking in August to get a car loan and feel I have destroyed my credit file by doing this. Has anyone even used payday loans and been ok to obtain decent credit?

    Im fine for cash now, lots happened all at once the past few months one thing after another, that's the only reason I used them, due to speed and being easy.

    Any advice would be great as im really wondering how this works. If every company go through your file or do they just get a score and accept or decline based on that and the details on your app?

    Thanks in advance

    If you had the loan and one thing after another happened again that led you to pay day loans, how would you deal with the situation ?
  • gman2013gman2013 Forumite
    8 Posts
    If that were the case I would cut my shopping costs down for the whole month. I would not socialise and I would not take any money to work. I pay my car at the moment every month so it wouldn't be taking on additional credit or anything my outgoings would be the same. Its just im needing a new car.

    If the worst came to the absolute worse I would speak to family I would never miss a payment I never have on any credit agreements ever I have always paid on time.

    Im basically just looking for some advice on the question I asked to be honest. But thanks for your reply
  • The only person who gives a hoot about your credit score is you, nobody else will even look at it, never pay money to obtain this random number which means absolutely zilch.

    They will go through every tiny detail on your credit file, add that to the other info you have provided (salary etc) and press the enter button.

    If all their lending criteria are met, you get accepted, the rate will reflect how well you met the criteria.
    If you don't make it, you are rejected.

    Payday loans are not good so whilst it doesn't guarantee a rejection, don't go expecting to get any headline rates.
  • gman2013gman2013 Forumite
    8 Posts
    Yeah I was meaning the score that's generated to the company, I know I see a different score to what it actually is !

    You've answered my question with regards to they go through everything. I just wondered how companies could give decisions so quickly if they went through it all. Thanks
  • Its all electronic, a machine does it all. Apart from payday loans who don't give a monkeys who they lend to, all the applicants are in dire financial trouble so they probably won't even look at it.

    Some lenders (nationwide) do a soft search initially to give an idea but they will still do a full search prior to acceptance.
  • gman2013gman2013 Forumite
    8 Posts
    Apples2 wrote: »
    Its all electronic, a machine does it all. Apart from payday loans who don't give a monkeys who they lend to, all the applicants are in dire financial trouble so they probably won't even look at it.

    Some lenders (nationwide) do a soft search initially to give an idea but they will still do a full search prior to acceptance.

    Ok well thanks for answering my question !
  • gman2013 wrote: »
    I just wondered how companies could give decisions so quickly if they went through it all.

    For traditional lenders

    Every bit of info that they have on you (either given by you or from records) will be given a value. Some bits will have a positive value (like the fact you are on the Register of Electors) some will have a negative value (like having a payday loan). The values are a different size depending on their importance to a lender.

    All those values will get added together and then compared to a scale, which determines whether you get accepted and if so for what rate.

    For PayDay lenders

    Their decision programs are a bit simpler to write.
    If Applicant = Alive Then
       LendMoney = Yes
    Else
       LendMoney = No
    End If
    
  • gman2013gman2013 Forumite
    8 Posts
    gb12345 wrote: »
    For traditional lenders

    Every bit of info that they have on you (either given by you or from records) will be given a value. Some bits will have a positive value (like the fact you are on the Register of Electors) some will have a negative value (like having a payday loan). The values are a different size depending on their importance to a lender.

    All those values will get added together and then compared to a scale, which determines whether you get accepted and if so for what rate.

    For PayDay lenders

    Their decision programs are a bit simpler to write.
    If Applicant = Alive Then
       LendMoney = Yes
    Else
       LendMoney = No
    End If
    

    You certainly made me laugh with the last bit :) and thanks for reply !
  • Clive_WoodyClive_Woody Forumite
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    gb12345 wrote: »
    For PayDay lenders

    Their decision programs are a bit simpler to write.
    If Applicant = Alive Then
       LendMoney = Yes
    Else
       LendMoney = No
    End If
    

    I'm not sure that they are all so picky!

    :D
    "We act as though comfort and luxury are the chief requirements of life, when all that we need to make us happy is something to be enthusiastic about” – Albert Einstein
  • hone123hone123 Forumite
    93 Posts
    gman2013 wrote: »
    I am new here and looking for some helpful advice. I have had a pay day loan a few times from payday express. Always paid back on time no issues. I have settled what I owe them in full this month and will not be taking another one again ever !!

    Now what I want to know is when a company ie Tesco bank, nationwide etc do a credit search on you for a loan, and they give you a decision in seconds ( I know not in every case). Do they just get the credit score generated to them by the Experian etc. Or do they look at every detail and see payday loans and run a mile.

    Im looking in August to get a car loan and feel I have destroyed my credit file by doing this. Has anyone even used payday loans and been ok to obtain decent credit?

    Im fine for cash now, lots happened all at once the past few months one thing after another, that's the only reason I used them, due to speed and being easy.

    Any advice would be great as im really wondering how this works. If every company go through your file or do they just get a score and accept or decline based on that and the details on your app?

    Thanks in advance

    Hi I found that when I had a payday loan as repayments were always on time it helped my credit rating, when I checked my credit rating score it always showed positive results. Companies want to see if pay back money borrowed on Time I don't think they would be interested in who or what just whether they are going to get their money back
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