How a payday loan can damage my credit score

Payday loans really work well for those individuals who need a quick financial relief till they are able to acquire their pay. However, this option is more of a last resort when there is no source to acquire financial relief. Once you request for a payday loan the best part is that it is not really going to affect your credit score. However, one prime requirement is that you have to indicate your income source and the kind of job you are doing. The requirements for payday loan include a check that has to be post-dated. This check is meant to cover your loans once your pay is available in your account.

The possibility of your payday loan affecting your credit score
There is only one possibility of your payday loan affecting your credit score. Let us assume that you check that is post-dated is not able to cover your dues. This way your credit score can be affected. However, if you have another alternative to clear your loans then that is one possibility to save yourself. However, if the dues are not cleared that can result in serious repercussions like the Lender may file a case against you and if the judgment goes against you your credit history may appear in the records.

Settling the repayment issues
You have to be good in your analysis and if you feel that you will be unable to clear your loans then the best thing to do is to have a solution to this problem prior to time. You have to communicate with the lender and let him know your problem. He would most probably devise a payment plan for you that will help you pay back your loans. The issue with this settlement is that you may need to pay a high amount of interest, but at least you can save your credit score from considerable damage. However, you have to ascertain one fact that you may need to face a high amount of fees with payday loans and this can get you into a greater amount of debt.

Going for the alternatives

  • Cut down on variable expenses.


  • It is always a better option to borrow money from friends and family members. This will save you from a great amount of interest.


  • You can opt for a credit card that does not require you to pay a high amount of interest.


  • You can even have a negotiation with lenders with respect to your payment dates.


  • One of your options can be cash advance from the credit card.


  • You can consider to overdraw your bank account and that can be a perfect temporary arrangement.


  • You can even consider opting for a small amount of loan from a financial institution.


  • However, if you do not find any of these options feasible then your last resort can be that you should only borrow as much as you can pay easily.






Awareness is the key and can prevent unexpected problems. You should make sure that you review your credit reports quite often. This way you would be aware of any potential errors and can be protected from any fraudulent activities. Moreover, if you feel that your credit score has experienced an unexpected decline this means that you need to pay attention to your credit. The best part is that you can easily get an access to free credit reports through AnnuaCreditReport.com. There are also services available that can assist you in keeping a track of your credit score. Therefore, believe in the proactive approach. This way you can prevent potential issues relating to your finance and can take a step ahead towards financial stability. The best thing to do is to prioritize your financial resources and if you need funds in case of an emergency you should use your resources smartly so that you do not end up in a greater mess. Once you plan your resources in an intelligent way you can even prevent a credit score decline and you would not need to opt for a payday loan once your other resources are available at your convenience.