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Payday Loans and Your Credit

Every day, people struggle with finances and often a little help is all that's needed to get them back on track until their next paycheck. For some, payday loans may be the answer. Because they often require no credit check, payday loans are ideal for those with little or no credit history. At the same time, they are perfect for someone who may have had credit problems in the past.

Instead of credit, payday lenders are more concerned with your current ability to repay a debt. This means that they will verify your employment and income, but will not typically pull your credit report. In addition, payday loans are not commonly reported to credit bureaus, which means they will not show up on your credit report. If you have concerns about future lenders knowing that you once applied for payday loans, you will be glad to know that it is unlikely.

Although payday loans are not issued based on credit, nor will they commonly appear on credit reports, they must be repaid as any other loan. Because they offer fast cash with very little qualifying, with the exception of steady employment, payday loans do not come cheap. Most lenders will apply fees based on the loan amount and may range from $10.00 to $30.00 per $100.00 loaned. For instance, if you borrow $1,500.00 in payday loans, you may be paying between $150.00 and $450.00 in fees plus the original loan amount. If you request that the loan be extended, and the lender agrees, these fees will continue to roll over as well.

If you would like to access your credit report, you are entitled to request a free copy from each of the three credit reporting agencies on an annual basis. You can either submit your request online, by phone or in writing. In addition, if you are turned down for credit, you will be given a letter of explanation from the lender containing a reason for their decision. The letter will also contain the contact information from the credit reporting agency, which was used during the decision making process. You will have approximately 60 days from the date of the letter to request a free copy of your credit report from the agency listed.

Payday loans are designed to be a short-term fix to a temporary problem. In most cases, they are used when unexpected events arise or the borrower simply falls a little short on cash. Although their fees can be high, they provide many with the instant relief that they so desperately need. When it becomes impossible to wait for the next paycheck to buy groceries, see a doctor or even have your car repaired, payday loans can give you access to quick cash as a quick fix to a temporary financial slump.

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Payday Loans In The News

CFPB Seeks Extension To Respond To Trade Groups' Preliminary Injunction Motion In Lawsuit Challenging Payday Loan Rule

The CFPB is asking the Texas federal district court to give it a 45-day extension to respond to the preliminary injunction motion filed by two trade groups in their lawsuit challenging the CFPB's fina...

Published:  Mon, 17 Sep 2018 15:53:00 GMT



While Feds Loosen Payday Loan Regulations, Colorado Voters Could Clamp Down

As the federal government walks back historic regulations on payday lending, Colorado voters this fall will be asked to tighten them -- a sign that strong consumer protections are increasingly being l...

Published:  Thu, 30 Aug 2018 12:04:00 GMT



Wonga's collapse and what it means for the people who rely on payday loans

Wonga, the poster-boy of the British payday lending industry, has gone into administration following an influx of customer compensation claims. Its demise is a result of government regulation to refor...

Published:  Fri, 31 Aug 2018 04:29:00 GMT



Senate approves payday loan regulation bill by 21-9

Looking to fix a failed 2008 law and address what are among the highest rates in the nation for small-dollar loans, the Ohio Senate convened a rare summer session Tuesday and passed new payday lending ...

Published:  Tue, 10 Jul 2018 10:59:00 GMT



Rock Island wants to limit payday-loan businesses

ROCK ISLAND - City council members are considering a limit on the number of payday-loan businesses allowed in the city. Ald. Dylan Parker, 5th Ward, said the idea was discussed during a study session ...

Published:  Thu, 16 Aug 2018 16:38:00 GMT



9 Alternatives To Payday Loans

You have an important bill to pay and not enough money to pay for it. A payday loan might be the solution to your problem if you don't mind paying very high interest rates. It's not uncommon for payda...

Published:  Thu, 16 Aug 2018 01:20:00 GMT




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