Improve Your Credit by Using Payday Advance LoansPayday advance loans are short-term loans which allow customers to have quick access to cash funds in times of a financial emergency. While most experts agree that these types of loans are risky and expensive, when used properly and in a responsible manner they can actually improve your credit score.
Payday advance loans are relatively easy to obtain. Applicants who have poor credit are not necessarily turned down for a loan just because of their past credit problems. Normally funds are wired to the borrower’s checking account within 24 hours. If you understand how to use a payday advance loan to your advantage, you will not only get the cash you need but also can improve your overall credit score.
How a Payday Advance Loan Can Help
Your credit rating is determined by how you repay the outstanding debt you owe. Making consistent, timely payments is the key to having a solid credit score. Every time you make a payment to your mortgage company, or car loan lender, or credit card company, it is reported to the various national credit reporting agencies. Financial lenders like to see an extended period of on-time payments on all your accounts.
With a payday advance loan, you can help yourself by simply repaying the loan on time. Take out a small loan that you can easily afford to repay within the two week period. Pay it off when it is due. Each time you do this successfully, you improve your credit. Plus when lenders see how responsible you are in paying off your loans, you may have an easier time obtaining better terms and larger loan amounts when needed.
To be fair, short-term loans do not have the same impact on your credit rating as a mortgage or car loan. But successfully managing your finances, including the use of payday advance loans, is always a plus.
Most payday advance lenders report your repayment history to credit reporting companies. Each time you take out a loan and repay it fully and on time, it positively impacts your credit score. Conversely, if you ever default on a loan it can have a serious negative impact. You should be aware that a payday loan contract is as legally binding as a loan you might receive from a bank or credit union. If you fail to repay the loan, the lender can start collection proceedings against you to recover the money you owe.