Monday, 28 October 2013

Dowell managed Payday loans help to improve credit ratings?

We are asked this question on a regular basis, so we thought it was time to share our thoughts on the subject and give you an answer.

Payday loans are short term cash advances which are repaid in full when a borrower received their next wage. They usually do not last any longer than a week or two, and for the majority of borrowers, the loans are repaid when they are next paid.

Although your credit score is not necessarily taken into consideration by short term lenders, there is no doubt that if you pay off your loans, manage your credit efficiently and do not let anything go into arrears, that it will have a positive effect on your credit rating.

If you have credit of any kind, like a payday loan, a credit card, a long term loan or a mortgage, as long as you make the payments as required, and you are able to keep them up without defaulting or falling behind, then your credit record will remain strong, and your credit score will be good.
A bad rating is a result of defaults, failures to pay, or CCJs. If you have any of these issues, then you will need to work toward clearing old debts and re-building your credit score. If you are unsure about how you can do this, we suggest you speak to an expert who can help and advise you about managing debt and improving your financial situation. Organisations like CAB will be able to help you and advise you on the best course of action or who you should speak to.

If you have taken out a payday loan, and have repaid it as agreed, then this positive information will be stored on your credit record and will be used as favourable information when you apply for a payday loan again.


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