Title

Can I Use a Payday Loan To Build Up My Credit Rating?

By the Pachyy Editorial Team

The Pachyy Editorial Team comprises a diverse and experienced team of writers, researchers and subject matter experts whose aim is to provide you with useful insights, guidance and commentary on all matters related to your personal finances.

Unfortunately, using a payday loan will not help improve your credit rating. While making on-time payments with certain types of loans, like installment loans, can positively impact your credit score, this is not the case with payday loans.

The reason for this is that on-time payments for payday loans are not reported to the three national credit bureaus – Equifax, Experian, and TransUnion.

Nevertheless, it is still crucial for you to stay on top of your loan payments and make sure they are paid on time. Failing to do so can have negative consequences.

Will a Payday Loan Affect My Credit Score?

It’s important to be aware that not making timely payments on your payday loan can have a negative impact on your credit score. To avoid this, it’s crucial to only borrow what you can manage and ensure that you stay up to date with repayments on any payday loan you choose to take.

Failure to repay your payday loan on time can result in the lender taking certain actions that could harm your credit score.

Here are a few examples of actions that your lender might take which could potentially damage your credit score:

  • Filing a lawsuit against you to recover the owed amount. Losing the case can lead to a damaged credit score.
  • Selling your loan debt to debt collectors who may report your failure to repay to credit reporting companies, resulting in a negative impact on your credit score.

It’s worth noting that simply taking out a payday loan won’t automatically damage your credit score. In fact, payday lenders may not even consider your credit score when deciding to offer you a loan. Additionally, they may not provide this information to credit reporting companies.

How Is My Credit Score Calculated?

Wondering how your credit score is calculated? It’s actually a combination of several factors, such as the amount you owe, your payment history, the length of your credit history, and more.

Having a high credit score generally means that you have a solid track record of responsible credit usage. This is great news for potential lenders because it shows that you are likely to make timely payments on any loans they may offer you, based on your past payment management.

Your credit score is represented as a three-digit number, usually ranging from 300 to 850, depending on the factors mentioned above. Keep in mind that the specific credit-scoring model being used can determine whether your rating is considered good or poor. For example, in the United States, FICO – the primary credit-scoring company – categorizes scores as follows:

  • Poor – 300 to 579
  • Fair – 580 to 669
  • Good – 670 to 739
  • Very Good – 740 to 799
  • Exceptional – 800 to 850

Sumbit an Application

Our application is user friendly, can be completed in under 5 minuets, will have zero effect on your credit score and is completely free!

Sit Back and Let Us Work Our Magic!

Once you have submitted your application, we will evaluate all options in real time and notifiy you within a few minuets of the lowest APR loans avaliable for you.

Receive your Cash

Subject to further checks and documentation, your lender of choice will wire cash to your checking account.


Apply For Cash Now

Can I Get a Payday Loan Even with a Less Than Perfect Credit Score?

Absolutely! While having a good credit score is generally advantageous, it is not always a requirement for obtaining a payday loan. Some lenders, including Pachyy‘s partner lenders, take a more inclusive approach and consider individuals with less than exceptional credit.

For instance, if you have bad credit, you may still qualify for a loan, subject to additional verification.

Regardless of your credit score, to apply for a payday loan through Pachyy, you need to meet the following eligibility criteria:

  • Be at least 18 years old
  • Be a resident of the United States
  • Have an active checking account (where the approved loan will be deposited)
  • Have a minimum monthly income of $800

To learn more about the payday loan companies we collaborate with, their criteria, and how to apply, please visit our website.

What to Do When You’re Struggling to Make Loan Repayments

If you find yourself unable to keep up with the repayments on your payday loan, don’t worry! It’s essential that you reach out to your lender as soon as you encounter difficulties. They are there to assist you and may be able to help you rework the terms of your loan, creating a repayment plan that suits your current financial situation better. This could involve granting you an extension or providing you with extra time to pay off the loan.

It’s important to note that failing to repay your payday loan on time or not repaying it at all can result in additional late fees and can negatively impact your credit score. So, it’s in your best interest to communicate with your lender and find a solution that works for both parties.

Sumbit an Application

Our application is user friendly, can be completed in under 5 minuets, will have zero effect on your credit score and is completely free!

Sit Back and Let Us Work Our Magic!

Once you have submitted your application, we will evaluate all options in real time and notifiy you within a few minuets of the lowest APR loans avaliable for you.

Receive your Cash

Subject to further checks and documentation, your lender of choice will wire cash to your checking account.


Apply For Cash Now

Leave a Reply