Payday loans & credit files

rodgerramjet

I'm looking to find out how true it is that credit reference agencies are reporting payday loans differently from a loan say from a high street bank.

I'm hearing reports of mortgage companies declining applications based on people having payday loans. I know they show up on your report and if you have used them then fine.

I have a mortgage and may look to renew in a couple if years but want to make sure I'm not being discriminated against because of it.

All were paid off in full and on time.

Also who monitors the CRAs if you have a complaint ??

matttye

Experian differentiate payday loans from loans, and they also offer other services such as audits of how many of a lenders' customers actually have payday loans.

"Starting with a free Payday loan data audit we will analyse your customer base and provide back high level insight on your portfolio including; usage of Payday loans in a month, age profile and unknown delinquency problems."

As per: http://experian.co.uk/assets/consumer-information/case-studies/Payday%20loan%20data%202.pdf

They're pretty much globally regarded as bad for your creditworthiness.

As for who you'd go to about your complaint, it depends on the nature of it. If it's about incorrect data, it would be the information commissioner.

rodgerramjet

Suppose my point is that a loan is a loan, so why differentiate.

I agree there bad but only if you can't pay them back. If someone borrows money and repays as per the agreement then that is a sign or creditworthiness.

I know some will say "you were stretched blah blah blah" but banks lend for home improvements etc so the same could be said "your stretched you cant pay for it blah blah blah"

Can anyone tell me what the difference is between a credit agreement drafted by a PDL and a high street bank ?

Think getting the ICO opinion might be worth while.

I suppose after a period of time dealing with finances prudently then any main stream lender will disregard them just as they do with other things

matttye

rodgerramjet wrote: »

Suppose my point is that a loan is a loan, so why differentiate.

I agree there bad but only if you can't pay them back. If someone borrows money and repays as per the agreement then that is a sign or creditworthiness.

I know some will say "you were stretched blah blah blah" but banks lend for home improvements etc so the same could be said "your stretched you cant pay for it blah blah blah"

Can anyone tell me what the difference is between a credit agreement drafted by a PDL and a high street bank ?

Think getting the ICO opinion might be worth while.

I suppose after a period of time dealing with finances prudently then any main stream lender will disregard them just as they do with other things

The difference is that you'd usually borrow a regular loan to make a (number of) large purchase(s) and then pay it back over a period of time, simply because you don't have the money available there and then.

A payday loan is usually applied for when you've ran out of wages for the month and need more to last you until next payday. This usually demonstrates a lack of savings and poor budgeting. I can't think of any other reason to take out a payday loan.

I'm not saying this is true for everyone, of course, but most.

Thrugelmir

rodgerramjet wrote: »

Can anyone tell me what the difference is between a credit agreement drafted by a PDL and a high street bank ?

The nature of the transaction. A PDL indicates financial distress and a last resort.

Not a good indication of being able to repay a mortgage over 25 years.