Payday loan affect on your credit file help !!

in Credit File & Ratings
23 replies 10.8K views
2

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  • Johnmcl7Johnmcl7 Forumite
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    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
  • ch3101ch3101 Forumite
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    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?
  • DCFC79DCFC79 Forumite
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    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. "
  • gman2013gman2013 Forumite
    8 Posts
    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.
  • kylararlinkylararlin Forumite
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    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 :(
  • 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_representativeExperian_company_representative Organisation Representatives - Private Messages may not be monitored
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    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
    Official Company Representative
    I am an official company representative of Experian. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to [email protected] This does NOT imply any form of approval of my company or its products by MSE"

    Posts by James Jones, Neil Stone, Stuart Storey & Joe Standen
  • Experian_company_representativeExperian_company_representative Organisation Representatives - Private Messages may not be monitored
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    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
    Official Company Representative
    I am an official company representative of Experian. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to [email protected] This does NOT imply any form of approval of my company or its products by MSE"

    Posts by James Jones, Neil Stone, Stuart Storey & Joe Standen
  • The_BossThe_Boss Forumite
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    *bump for others*
  • 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.
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