Everyone can think of a time when money was tight but a bill needed to be paid. Sometimes the answer is to skip paying another bill or drastically reducing spending to have enough to pay the bill, but those options aren’t always ideal and can put you in further debt. If you suffer from bad credit, loans may be hard to come by. However, payday loans are available to people with bad or no credit making it the ideal loan for a small amount of money. If you need a short-term loan, consider taking out a payday loan for emergency money needs.
Why Can I Have No Credit or Bad Credit?
Some people question why anyone would lend them money if they have no credit history or a poor credit history. All you need for a payday loan is proof that you have a job with a minimum monthly income determined by the lender and a bank account. Because you are not making small monthly payments, and because the loan amount is often under $1,000, short term lenders often don’t care about credit history. So, if you have bad credit, loans from a payday lender are often a solution when you’re in a financial crunch.
Can a Payday Loan Make My Credit Score Improve?
Because you’re not expected to have a credit history when applying for a short-term loan, repayment of this loan will not positively affect your credit score. You should not take out a payday loan under the assumption that you can rebuild your credit history by paying off small loan amounts. However, while this type of loan won’t rebuild your credit history, it can hurt it. Every lender has different terms and conditions regarding these loans, and if you fail to repay it on time, they may report it to your credit company.
Short-term lenders will tell you that payday loans are not a permanent solution for money troubles. These loans are perfect for getting quick cash for an emergency situation, but you shouldn’t depend on them as a regular source of income. Sometimes, payday loans are the only available bad credit loans someone can get, so don’t discount it as a viable source of money when you need it the most.
