Payday loans on credit report

garethw08

Do having lots of 'Satisfactory' pay day loans go against you? I have 9 entries on my credit expert report that were ALL paid in full on time. Will lenders see this as a negative that I had to take out a pay day loan in the first place or would they see the positives that they were paid back in time?

DevCoder

Most will see it as a negative as it indicates lack of budget control and desperately seeking funds.

ricky_v

Mortgage companies generally view pay day entries in the past couple of years as negative as it shows that you're most likely going to struggle with repayments.

antonymp

A lot of lenders, especially mortgage lenders won't even consider you if you have Pay Day Loans on your credit file, it could be seen as you are or have been desperate for money.

DCFC79

Could you have done without the pay day lenders ?

If answer is no then maybe its time you look at doing a budget, have a look at the debt free board and post up a statement of affairs.

garethw08

Thank you all for the replies. I can understand what you were saying. At the time I was sort of in a rut with them, would pay off the previous months one with my wages then by the end of the month would take another one and so on. Was a bit of a vicious circle. I have not had one for a couple of months now as I have 'done my time' as an apprentice and am now on a full wage. Was looking to get a mortgage in the next 18 months so trying to sort my credit file out. No need for me to take another pay day loan out now as I earn enough to get me through the month and still have funds left.

lordash

From what I understand, having any PDLs in the past 6-12 months, or having a significant number of PDLs (>3) over the past 2-3 years will likely lead to rejection / sub-prime rates. Entries older than 2-3 years should be ignored by most lenders, provided the accounts were closed satisfactorily.

As always with mortgage lending the bigger the deposit, the more likely the lender will overlook minor credit issues. I have not heard of PDLs affecting other forms of borrowing, but that may now have changed.

Best thing to do would be to try and clear down any existing debts, and start saving regularly. This should help you build up a deposit and demonstrate to lenders that you have the discipline necessary to pay a mortgage - this is even more important now that MMR is being used. I'm sure a good recent credit report (e.g. no late payments in past year, low debt to available credit %, available credit <= 50% of income) along with well managed current/savings accounts should counteract historic PDL usage.

GingerBob_3

"Well managed" payday loan entries work in your favour. We know this because Experian have told us so, and they should know.

DevCoder

GingerBob wrote: »

"Well managed" payday loan entries work in your favour. We know this because Experian have told us so, and they should know.

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