Did you know you can get a free credit report from each of the three credit bureaus every 12 months? You won’t see the payday loan on there unless it landed on the desk of a debt collector. By viewing these reports you will be able to manage the information posted by creditors for current and past debt.
Free access to your credit history has been very helpful to many consumers. When creditors make errors reporting negative comments, it can be quite damaging. As a result an individual may be turned down for a well-deserved credit opportunity. Negative changes to current accounts may also result from these false reports. Did you know that it only takes one bad report to reflect negatively on interest rates that other creditors may charge? Think of a creditor as a vulture, hovering over your accounts waiting for any reason to raise your interest. We can laugh at the simile or cry at the truth, but accurate credit reports are important to current and future finances.
When you do obtain a copy of your report, you will want to comb through the data searching for errors. It may come in the form of wrong address or a misspelled name. Report all errors so they may be changed. If it is found on your personal information, give the credit bureau a call. Call the actual creditor if information reported to the bureau is incorrect. Look at dates, amounts and payments inaccuracies. Once this information is sent in and reported you are the only one who will care if it is right or wrong. Protect your finances by using the free credit reports and monitor the data.
The down side to these reports is the omission of the credit score. You have to sign up with a paid service to obtain the actual three digit number used so heavily by creditors and lenders. Look for service that offer free trial periods. You will be able to obtain your score and cancel the service before the first payment is expected.
Turning credit history into a credit score is an involved and almost secret process. The credit bureaus do not publish the exact algorithm used to obtain the number. It is generally well-known many aspects to obtaining good credit. It seems that poor money management tends to be one of the larger culprits creating low credit scores.
How does a payday loan fit into credit scores?
Once credit scores have fallen, there are many doors which will close as a result of the lowered number. One door which remains open is the payday loan industry. These small short-term loans offer small loans which are not based on credit scores. In fact, they have absolutely nothing to do with the credit bureaus. (Collections agents will report the debt if it lands on their desk) For those individuals who have a low score, these loans have offered assistance for emergency expenses.
A payday loan works as a bridge between a due date and the next paycheck. It keeps late and overdraft fees from wasting more income. The loan work best when there is a payoff plan to back the full payment of the loan after the two week period. When paid on time, a payday loan is a cost effective approach to money management.
It makes no sense to monitor your credit if you have no intention on maintaining it well. Find out where you stand with most creditors and know that there is help even after those doors are shut tight.