Will A Payday Loan Affect My Credit Score?

When a payday loan seems like your only option, you need to take a step back, consider your situation and determine how you got there. Do you need a payday loan because you have bad credit, is it because you have no credit or are you drowning in debt? Every individual’s situation is different.

Why would I need a payday loan?

Payday loans are used for a number of reasons. They are popular for people who need quick cash. When you’re in the position of needing money immediately, the advantages of a payday loan outweigh the disadvantages. Here are just a few reasons one would want to use a payday loan company:

· You can get a payday loan regardless of your credit score as there is no credit check involved
· You can apply in person, online or on the phone
· The application process is quick and the loan can be obtained in less than 24hrs
· No one else is involved with the loan so it’s discreet
· People in a desperate state of finance may not be aware of their options
· Payday loan companies are everywhere
· It’s a quick fix

Those may all seem like great reasons to turn to these types of loan but payday loans come with a high price so beware!

Will a payday loan affect my credit score?

Yes, if you don’t make your payments on time, you will be reported to the credit bureau, further damaging your credit score. Since payday loans are easy to obtain and you don’t need a credit check, it’s very popular to people who are already experiencing financial hardship and borrowing money with such high interest rates are only putting them in a worse situation. This is really bad for the borrower. When this happens, it’s extremely easy to get caught up in the payday loan trap with a “rollover” loan which essentially is getting another loan to repay the last loan and so on...

There are many alternatives to getting a payday loan. If you need a loan, research your options. There are many financial institutions that will provide you with a loan and also help you rebuild your credit in the process. Prudent Financial Services has been repairing credit with open and affordable loans to people with bad credit histories since 1984.

For further information visit www.prudentcreditrepair.ca