Payday loan affect on your credit file help !!

Johnmcl7

hone123 wrote: »

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

Your credit score is just a number, financial institutions will use their own scoring system which can be quite different to the score produced by the credit rating agencies. This is an example of such a difference as increasingly lenders do not like to see payday loans even though they're paid back leading to people being declined for loans because of the existence of payday loans on their credit report.

John

ch3101

from their point of view, the fact you took a payday loan means that you didn't have enough money left that month so needed extra money to get by.

So what if you need extra money a few months throughout the loan and default?

DCFC79

ch3101 wrote: »

from their point of view, the fact you took a payday loan means that you didn't have enough money left that month so needed extra money to get by.

So what if you need extra money a few months throughout the loan and default?

Thats the point I was trying to get across, the reply was

" 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. "

gman2013

DCFC79 wrote: »

Thats the point I was trying to get across, the reply was

" 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. "

Yes I know what you were saying. However direct debits are paid monthly I would have a month to sort something out, the stuff that happened literally gave me a few hours to sort it out. So knowing I had direct debits to pay would be a different story, as I would know the date I had to have it by.

kylararlin

hone123 wrote: »

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

They are very interested in where the money is going, many of the automated systems are set to check for a certain amount of PDLs in a set amount of time and will automatically kick out any application that meets that criteria.

As pointed out previously, the credit rating itself is never a solid indicator of acceptance - I've had a loan approved while Experian showed me at 430 and been declined a similar amount a few years previously at 999

gb12345

kylararlin wrote: »

As pointed out previously, the credit rating itself is [STRIKE]never a solid indicator of acceptance[/STRIKE] totally irrelevant in real life- I've had a loan approved while Experian showed me at 430 and been declined a similar amount a few years previously at 999

Corrected that for you.

Experian_company_representative

Made me laugh too

Most lenders use a score, or several scores, and only look at the data when dealing with referrals or appeals. In many cases these scores are calculated using scoring systems built by the credit reference agencies, but calibrated to that lender's policies and using a wider selection of data than you'll find on your credit report. Your credit report score is simply a guide to how an average lender is likely to assess your credit history information. So it's indicative but not definitive.

James Jones

Experian_company_representative

By the way, this Q&A might give you a bit more background on how payday loans are likely to affect credit decisions.

James Jones

The_Boss

*bump for others*

Marga09

It will not affect your credit file if you repay the payday loan on time and in full then any effect on your credit rating could be positive. Repaying a payday loan on time and in full should therefore strengthen your case, because many payday and other short-term loan providers are now sharing customer records with Experian. Paying your payday loan on time and in full tells that you are a responsible borrower that's why it can't affect your credit file.