June 1, 2016
The common question many people ask is whether bad credit history will affect their ability to request for a payday loan. Payday loans with bad credit are taken up by people who use them for emergencies and pay them back on their next paycheck. Actually, payday lenders do not run a credit check to assess if you are qualified to get a payday loan. This eases the process of application. However, payday lenders may require you to provide a post-dated check to cover for the loan amount once the loan has been released to your account.
In situations where post-dated checks provided are not cleared by a bank, they may have an effect on your credit card. It is important to have a good source of money to clear your payday loan once it is due. Defaulting on loans is not the best thing to do since the debts will be sold to a debt collection agency and are reported to the bureaus.
Sometimes, you may take out bad credit payday loans and are subsequently unable to pay it back in time. In this case, you should first request a new payment plan for repaying. However, this may incur more interest and fees. The good thing is, you prevent a default on your loan and will not damage your credit score.
You should exhaust all other alternatives before considering a payday loan. Taking out a payday loan should be your last option of a loan. Bear in mind that delayed payments on a payday loan may not be good for your credit score.
In conclusion, you will need to avoid sinking further into more debts if you have taken out a payday loan. This will only injure your credit score. Keeping an eye on your credit card expenditure during such times is crucial if you want to have a good score. The credit reports are easily obtainable online and they can be used to monitor your credit score.