A payday loan cannot be used to improve your credit score. It is possible to improve your credit score by making timely payments on certain types of loans such as installment loans. A payday loan will not help you improve your credit score.
This is because the payday loan payments that are late on their due dates are not reported by Equifax or Experian, three national credit bureaus. Visit oakparkfinancial.com official website for more information.
It is crucial that you pay all your loans on time. Paying late can have negative consequences.
Does a payday loan affect my credit score?
If you fail to pay your payday loan on the due date, the lender could take legal action. It is likely that this will have a negative impact on your credit score.
These are just a few examples of actions your lender might take that could damage your credit score.
- The borrower may be sued for the amount owed. Credit damage could result from losing the case.
- Lenders might sell the borrower’s debt to creditors. A debt collector could report the failure to repay the borrower to one of the credit bureaus. This could result in a damaged credit score.
Payday loans can have severe consequences for your credit score or credit history. However, if you take out a loan, it won’t be affected. Payday lenders may not take into account your credit score when determining whether you are eligible for a loan. Credit reporting companies might not be informed.
How does my credit score get calculated?
Credit score is calculated using a combination of several factors like the amount you owe and your payment history.
A high credit score is usually an indicator that you have a good credit record and are responsible. This will show potential lenders that your ability to pay back any loans you receive is strong.
The credit score is expressed in three-digit numbers. This number can be anywhere from 300 up to 850 depending on the factors discussed above. The credit scoring model you use will impact how good or poor credit ratings are. FICO, the U.S. credit-scoring authority, rates these scores the following way:
- Poor 200 – 579
- Fair – 580 – 669
- Good 670-739
- Excellent 740-799
- Exceptional 800-850
Do I need to have a good credit rating in order to take out a payday loan?
Not necessarily. Not necessarily. Although having a good credit rating can be a plus as it assures lenders that you will be able to pay back the loan on time, there are lenders who will accept applicants with less-than-stellar credit ratings.
OakPark’s lender will examine credit reports of many people. Even if you have poor credit, you may still be eligible to borrow money. This is subject to further verification.
You must meet these eligibility requirements to be eligible for OakParkFinancial’s payday loans.
- Minimum 18 years.
- You must be an American Resident.
- You will need to have a checking account in order for the payday loan application to be approved.
- The minimum monthly income should not exceed $800
Get more information on the payday loan companies with which we work, the criteria and how to apply.
What do I do when I am unable to pay my bills?
If you are having trouble paying your payday loan repayments, talk to your lender right away. You might be able help your lender to restructure the terms of your loan and make it more affordable. You might be able extend the loan term or get more time to repay the loan.
Additional fees could apply if your payday loan is not paid on time. Credit score may also be affected.