Will applying hurt my credit?

There is a misconception that if you apply for a payday loan
that it could affect your credit. However, that is not true because credit
really does not have much to do with the qualifying process of payday and cash
advance loans. When you apply for this type of loan, there is no credit history
inquiry performed in order for you to qualify.


You do though, need to understand that there are
interactions between the loan product, your credit score and your history once
you have qualified and received your payday loan. It’s important that you know
what these are if you want to maintain a healthy credit score and history.


The interactions do not have anything to do with your
applying or your approval but once you have qualified, it is important to make
a positive impact on the company that you have received your payday loan from.


Even though this type of loan is meant usually for
emergencies, these loans can be a wonderful tool for you to help your credit
score and history, if you go about it properly. Even though being approved will
not affect your credit the prompt repayment of your loan is recorded on your
credit history and this then becomes a positive mark for your credit score. On
the other hand if you are late in your repayment of the payday loan it will go
against you as a negative mark on your credit score and will tarnish your
credit history in the long run.


If your debt is allowed to accumulate it is going to affect
the debt to income ratio and this is what impacts your credit in a negative
fashion. So, it is vitally important that you try to avoid using these types of
loans as your main resource for financing because often when you get behind you
then try to get another loan to pay off a previous loan and this can lead to a
very vicious circle and can be quite devastating to your credit.