Mmastodon BusinessPersonal Finance first seen 4 h ago, last 4 h ago, peak #6

Payday loans rarely affect credit unless payments go unpaid

Original: Do payday loans affect your credit? Not usually — as long as you repay on time and the lender doesn't report it. However

Personal finance guidance circulating this week explains that payday loans generally do not affect your credit score, since most payday lenders do not report on-time repayments to credit bureaus. The catch: if a borrower defaults, the debt can be sold to collections, which will seriously damage the score and stay on the credit report for up to seven years. Commenters are sharing the advice as a warning to borrowers weighing short-term loans against the long-term consequences of missed payments.

Why now: Rising borrowing costs are pushing people to short-term loans, and this clarifies a commonly misunderstood credit risk.

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• Do payday loans affect your credit? Not usually — as long as you repay on time and the lender doesn't report it. However, if you miss a payment, it can go to collections, tank your score, and remain on your report for up to seven years. Our guide covers the risks and how to… · 1firstcashadvance

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