Yes. Any payday loan you receive has a potential to affect your credit score. In fact, even enquiries made through due channels for payday loans reflect on your credit history.
Personal credit reporting system in Australia was revamped in 2014. The credit file/record of every individual is now categorized into three broad sections – consumer, public and commercial.
Any and every payday loan activity will be classified as a consumer credit information.
Every definitive attribute of a payday loan will be recorded on your credit file. Definitive attributes of a loan are factors that are agreed upon in a loan agreement; these include:
Applying for a payday loan won’t itself affect your credit score directly. However, defaulting on a payday loan will certainly impact your credit score negatively, making it more difficult for you to have access to future loans.
In the same spirit, paying your payday loan in due time without attracting any penalties will impact your credit score positively.
Positive repayment history is a great asset to have for every individual. Paying back a payday loan duly can not only help boost your credit score as mentioned earlier, it can also help nullify the negative repayment history from the past.
For example, if you have a defaulted loan from ten years ago, but you have managed to repay your payday loans consistently in recent years, it will be counted in your favour.
Not really. Even though payday loans are mostly sought by individuals who have a bad credit score, nothing prevents people with a healthy credit score from applying for a payday loan.
Definitely not. If you have duly settled a payday loan in the past, it will not hamper your chances of getting any other loan.
However, views that lenders have in such cases can be subjective.