Payday loans will affect your credit score only if you default and they are sold to a collection’s agency. Credit scores are a good thing to protect. You would be surprised at some of the things that can change your score. Some of things may only make a small shift in your score, but if you are on the border of a certain range which creditors look for, it may make the difference between obtaining financial help or not.
Pay off your payday loans to protect your credit.
- Did you know that an old unpaid fine could affect your credit score? Some major municipalities have cracked down on outstanding parking tickets and library fines. These small debts which have been left unpaid are now being sold to collections agencies. Anytime you have an account with one of the collections agencies you credit score is negatively affected.
- Credit cards with no set limit, report you credit limit as $0. Your credit utilization rate uses these limits to help determine your score. This zero limit can definitely make a small dent in your credit score.
- Credit cards report balances and limits each month on a certain date. If you happen to spend quite a bit on your card right before the company reports your information, the increased balance on your card could ding your credit utilization rate therefor e hurting your credit score. Your credit report will show he dates the reports are made if you want to keep that big purchase off your credit report for another month. This will make a big difference if you are planning on paying the purchase off before the next reporting date. Doing so will keep it permanently off your credit score.
- Have you stopped using a credit card? Accounts which have been neglected for long periods of time may stop reporting to the credit bureau and just mark it as inactive. Creditors have to pay to report, so if the card is inactive, the creditor will find it unnecessary to continue reporting the card. These actions will have a negative effect on your credit utilization score which will put a dent on your score.
- Hard inquiries to your credit history can deflate your score by a few points. Opening a new credit card or bank account will initiate a hard inquiry. You may not realize it , but additional hard inquiries to your credit cold come with a car rental, getting a cable subscription or having a utility account set up in your name.
- Any time you settle a debt for less than the amount owed will remain as a “settled” status for seven years. If you have chosen the route to have debt settled, know that the only way to get this off your report is to wait seven years of pay the remaining amount which was initially owed.
Spotya! Online Payday Loans is working hard at making its readers aware of financial matters which can be controlled by the individual. Low cost payday loans are not solutions for everyone, but they are a good choice to those who can afford the fast payoff while deterring other negative reports onto your credit score. Credit scores are important for much of the financial help out there; an online payday loan will not affect this score unless the debt is unpaid. Protect yourself by educating yourself as much as possible on your personal finances and available options.
