How Do Short-term Pay Day Loans Affect Your Credit Score?

Payday loans could be the best option if you need a small amount of cash. Usually, people turn to it for a quick financial boost when they can’t get a loan somewhere else. Therefore, it is obvious to be concerned about how taking a pay day loans can affect your credit score.

Your credit score always gets impacted with a pay day loans as all credit requests and repayments get recorded on your credit file, which shows the entire history of borrowing. Before giving out a loan, lenders always conduct a thorough search of the application. Further, depending on the CRA, that search will be recorded on your credit file for 1-2 years.

Taking a payday loan from a reputed lender

If you are planning to take a payday loan, contact PM Loans who are a direct lender and broker with access to a large panel of lenders helping you find the best payday loan deal for you. They offer you a payday loan even for a small amount of cash like £50-100, which is usually for an emergency unexpected expense. 

Since they are both a broker and a direct lender, they can match their customers with the best loan provider according to their needs. Visit for a quick, secure, and easy process and apply for a payday loan.

How do payday loans improve credit scores?

It is important to show proof that you have repaid debts on time so that you can have a positive credit score. You can pay off your short-term loan in full and on time if you don’t skip a repayment. 

This improves your credit score and increases your chances of getting more loans in the future. Credit repayments also remain forever on your record. 

Can payday loans make it difficult to get a loan in the future?

Any reputable lender will first perform a “hard” search of your credit history before offering a loan hence, applying for credit can be harmful. Your credit score will slightly have a negative impact as a result of this search. 

However, the negative impact will be less if you pay off the loan on time. Lenders will be able to see how much, when, and from which sources you applied for a loan

Moreover, applying for many payday loans in a short period will also lower your credit score. It is a strong sign of reckless borrowing or serious money problems. This could harm your chances of obtaining another loan in the future.

Missing a payment on one of these loans strongly indicates irresponsible borrowing. This gets reported to credit reference agencies and lowers your credit score significantly and permanently. There is also a possibility that some lenders may be turned off by finding out about the payday loan in your credit history even if you have paid back the loan in full and without delay. 

Different lenders perceive having pay day loans in your credit file. Taking a payday loan need not harm your credit score provided you make the repayments on time and do not miss any repayments.

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