Payday loans are the best ways to earn quick cash. Like most forms of credit, however, applying for one can make an impact on your credit score. Bear in mind that any loan application (approved or otherwise) and the information of the amount you borrowed, repayments, and other details are always included in your credit report. The answers aren’t always negative, however—when done correctly, a payday loan can significantly boost your credit score.
To take a payday loan, you will need to visit a payday lending store. Here, you’ll be asked to present your pay stubs, along with bank statements for verification. After this process, you will be given access to the cash.
While getting a payday loan is quick, easy, and guaranteed, there are certain rules you need to follow. Repayment is strictly enforced, for instance, as this holds an impact on your credit report. If you wish to learn more about payday loans, this quick guide is for you.
How can payday loans help my credit score?
As previously mentioned, your credit score will be affected—but not always negatively. As a borrower, it’s your responsibility to make repayments on time, ensuring that you pay the loan in full during the agreed term. By doing so, you demonstrate good credit habits and therefore, increase your credit score.
Bear in mind that repayment history is listed on your credit score, so it’s paramount that you demonstrate that you’re more than capable of keeping your end of the bargain. Any late or missed payments will be listed, effectively affecting your credit score and chances of getting loans approved.
What should I avoid when it comes to payday loans?
1 – Taking out too many loans.
Taking out multiple small loans can give a bad impression to prospective lenders, as this behaviour may be a sign of an unstable financial position and can harm your future loan applications. It may be in your best interest to resist taking out too many loans even if you repay them on time.
2 – Making several applications in a short space of time.
If your payday loan application hasn’t been approved yet, it’s best not to send too many applications within a short time frame. Your credit report reflects account opening dates, the number of accounts opened, and all of your applications.
By making too many applications, you may be signalling an unstable financial standing, much like taking too many loans. Try and allow a few months to improve your credit standing and repay your loans before sending another application for a payday loan.
Are Payday Loans Right For You?
As with any financial situation, deciding on the payday loan application compels you to take a look at your current financial situation. Make sure to consider the interest and fees involved with the loan, along with your capacity to fulfil your end of repayment. If the odds favour you, take out a payday loan. The big boost in a credit file is a benefit worth reaping, and it also serves you instant financial relief in time of need. Ultimately, however, the choice is up to you.If you’re looking for quick access to cash in Australia, Cash On Your Mobile is the place to go. As a licensed credit broker, we offer you the chance to borrow from the country’s most trusted lenders. Registered with the ASIC and Credit Investments Ombudsman (CIO), we offer you a legal and safe way to get up to $50,000 whenever you need. Get that cash—apply now!