How Payday Loans Can Affect Your Credit Rating

by Alfred Finann Senior Director of Content/Executive

When you are in a financial bind and need cash fast, you may be considering a payday loan. Payday loans are short-term loans that are typically due on your next payday. While they can be helpful in a pinch, they can also have negative consequences for your credit score if not managed properly.

If you default on a payday loan, it will likely be reported to the credit bureaus. This can cause your credit score to drop significantly. Additionally, if you repeatedly take out payday loans and do not repay them in a timely manner, this can also lead to a lower credit score.

If you are considering taking out a payday loan, be sure to shop around and compare rates from different lenders. You should also be sure to read the terms and conditions of the loan carefully before signing any paperwork. Payday loans can be helpful in a pinch, but they can also have negative consequences for your credit score if not managed properly.

Source: https://financeguider.com/guides-and-tips/useful-tips-for-payday-loan-borrowers