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How Payday Loans Affect Your Credit Score


Will a payday loan affect my credit score?

Those who are unfamiliar with payday loans and how they work often have plenty of questions to ask.

Understandably, one of the most common questions is “do payday loans affect your credit score?” Generally speaking, the answer to that is no, they don’t; however, it is possible for payday loans to negatively impact your score if left unpaid.

Here at Net Pay Advance (and at most other lenders, too) we don’t even ask to see your credit. It makes no difference to us whether your credit score is good or bad – we’re just here to provide financial relief to those who need it. Although we don’t need your credit score to approve you for a loan, if you fail to pay back your loan, your balance may be turned over to a third-party collections agency. That’s where the impact comes in.


How Payday Loans Impact Your Credit Score

Some individuals seek out loans based on a desire to raise their credit score. While certain types of loans can improve your credit score, like installment loans, paying back or making payments on a payday loan will have no effect on your credit score. Typically, payday loans aren’t reported to any of the three major credit reporting companies, meaning there’s not even a chance for payday loans to positively impact your credit score.

In the hands of a payday lender, failure to pay back a payday loan still won’t harm your credit. Payday lenders will usually attempt to contact you multiple times to collect payment before handing your debt over to a third-party collector. If the debt collector then reports the debt to one of the national credit reporting agencies, that’s when your payday loan debt could then begin to weigh down your score.

This is one reason that Net Pay Advance pushes so hard to collect late payments. Paying off your payday loan in a timely manner will prevent your loan from going to collections and leading to a mark on your credit report. It’s just as much for your benefit as it is ours. (Plus, once you’ve paid off your loan, you’re immediately eligible to reapply!)


Ways to Improve Your Credit Score

If you are interested in raising your credit score, we have a couple articles here and here that may help you or at least give you some ideas.


If you have any questions about how payday loans work through Net Pay Advance, don’t hesitate to reach out. You can call at 888-942-3320, use the chat feature on our website, or email us at customerservice@netpayadvance.com during our business hours to speak with a representative.

And, of course, remember to pay back your loan on time! While payday loans typically won’t affect your credit score, it’s not impossible. Play it safe and make your payments!



Wednesday, August 29, 2018
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    Customer Notice: Short-term advances should be used for short-term financial needs only, not as long-term financial solutions. Customers with credit difficulties should seek credit counseling.

    Short-term Loan 14-day APR Range: 391.07% - 664.29% APR varies per state regulations. View Rates and Terms to view the APR in your State. Failure to make timely payments may result in NSF or late fees. If your account becomes severely delinquent, it may be turned over to a 3rd party collection agency which could impact your credit score. Loans do not automatically renew without prior approval. If you renew or "rollover" your loan, your principal balance may not be reduced and you will owe additional fees and/or interest.

    Net Pay Advance, Inc. is licensed by the California Department of Business Oversight pursuant to the California Deferred Deposit Transaction Law

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