Most people who obtain fast money by using online cash advances have good intentions of paying the loan back. There are times though when extra costs or other money demands interfere with a fast payoff. A cash advance will not affect your credit unless you default on your loan and it goes to collections. If you have chosen a responsible lender for your short-term loan, call the company and work on solving the problem before you miss a payment. Most companies are willing to at least listen and many will come up with a plan before problems start.
Communicate a future problem with your online cash advance lender.
Once your cash advance debt is transferred to a collections agency, your debt will be reported to the credit bureaus. If you are able to keep it out the hands of a collections agency, your credit will not be affected by taking out the short-term fast cash. Keeping credit history clean of defaulted debt is your best bet to getting low interest rates and higher credit limits. As soon as you stumble with one debt, other creditors will begin to lower your limits and raise your interest. One mistake could snowball into all you other accounts. Cash advances do not look at your credit and no interest amounts change. What you sign up for is what you get until your loan is paid off. Do what you can to keep this cash advance debt off of your credit history.
5 other ways to damage your credit:
- Make on time payments. This is probably one of the biggest factors in people losing points off of their credit score. It is also one of the easiest ways to improve those same numbers. Keep your credit moving in the right direction by making payments on-time every time. Online cash advances have been helpful to many customers who needed that extra boost to make up for a small deficiency in their bank accounts. Pay the loan off at the next payday and your financial situation remains positive.
- Carrying too much debt will hurt your credit. Even though the limit on your charge card says you can spend $3000, the credit bureau would like to see you keep the balance at $1000 or below. Emergencies do happen, but the faster you pay them off, the better it will be for your long-term credit as well as your budget.
- Don’t let any debt go into default. Once the collections agencies get a hold of your debt, your credit will drop in numbers. Do what you can to negotiate with your creditors before a default takes place. Communication is the key to a more successful payoff. Cash advance lenders are not the only creditors who want to know there are problems before payments are stopped.
- When your debt reaches to the courts and liens or judgments have been made against you, Your credit had already been in trouble and is now branded for seven long years. Creditors are finding it easier to obtain money from debtors when using small claims court to collect on defaulted loans. A debtor cannot ignore a court request like they can a debt collector. Not showing up to court is a fast judgment against you.
- Bankruptcy is a poplar negative for debtors. It is not an easy process, and will require upfront money, but those who choose to use it to solve debt problems will still have the burden of a very low credit rating for up to 10 years.
Keep your finances on target with your budget. Review the success of the budget each month in order to make necessary changes before a problem arises. If you have to use a cash advance, then make sure you do so knowing you can pay it off in full or have a backup plan to fall upon. Taking out a cash advance will not hurt your bank account or your credit unless you make it a long-term loan or default on the payments.
