Will a Payday Loan Hurt or Help my Credit Score?


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I need help with understanding how exactly will my credit score be impacted by the payday loan I am about to apply for. I need to know for sure that applying for a payday loan won’t hurt my not so brilliant credit score. I’m at the limit & every point counts. Thank you in advance!
– Samuel


The Answer

Whether a payday loan has a positive or negative effect on your credit score depends on whether you can successfully pay it off on time or not.

Paying the Loan Back Will Positively Influence Your Credit

Assuming that you are borrowing responsibly and all goes according to plan, you should have no problem paying off the loan when it comes due. If that is the case, the lender should report your compliance with the low terms to the credit bureaus. It should reflect positively on your score.

Not Paying Your Loans on Time Will Have a Negative Impact on Your Score

If however, you do not pay off your loan on time, that too will be reported to the credit bureaus. Failing to pay off your payday loan when it is due will damage your credit score.

Proper Planning

It is just one more reason to make sure that you can afford a payday loan before you decide to take one out. With proper planning, payday loans can be used to cover emergency expenses without hurting your credit score.

Reviewed by: Casey Bond
Date Reviewed: Apr 05, 2019


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The answer on this page is provided in collaboration with some of our trusted lenders who are proud members of the Online Lender’s Alliance. The purpose of the provided answers is to inform the consumers about the specifics of online lending. It should not be treated as legal advice or regulatory guidance. The information is updated periodically and may include links or references to third-party resources or content. SDL365 does not endorse any third-party nor does it guarantee the accuracy of the third-party information. We encourage you to consult other resources that might serve your needs and take into account your particular situation.


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