Tag Archives: credit checks

Can Payday Loans Repair Poor Credit Scores – Revisited

Can Payday Loans Repair Poor Credit Scores - Revisited

So can a payday loan or short term cash advance really help a poor credit rating?

I was re-reading an article on payday loans and credit scores that I wrote back in November 2011 and realised that it hadn’t really answered the question.

Well – it hadn’t answered the question to my satisfaction, which is why I felt it needed addressing again – so consider this article it’s official SEQUEL!

After looking at payday loans and the way they’re administered and whether they actually appear on credit scores I finally came to a conclusion that I was happy with.

A number of years ago, when monthly cash advances first made their mark in the UK, the industry was still too fledgling and too far removed from traditional financial services for it to be considered as a credit scoring factor. However, more recent research suggests that this is no longer the case.

When you take out a payday loan with a reputable supplier – be it Wonga.com, PaydayUK or QuickQuid, the loan will appear in your credit score.

More importantly – when you repay the short term loan this will also appear on your credit score. This suggests that payday loans could be more useful than a simple emergency source of credit.

Think about it for a minute… you badly need credit to help pay bills or help buy a new car. Unfortunately no one will lend to you because your credit history is just too poor.

But hang-on a second – you’re no longer the irresponsible spender you once were. But the lender or credit card company doesn’t know that – based on your credit score.

So you turn to a payday lender for a quick, short term loan – you repay the full amount at month-end. This positive repayment is shown on your credit history – indicating that you are once again a good bet.

Now I’m not advocating payday loans as the saviour of poor credit scores… but this example surely shows you the potential.

Credit checks urged to protect against identity fraud

A recent survey by Fellowes indicated that British businesses and consumers are simply not doing enough to prevent identity fraud.

The survey was carried out to mark the begining of National Identity Fraud Prevention Week (NIDFPW) and showed that 94% of Brits believe they could be at risk from identity fraud, however, only 44% regularly check their credit card statement and bills against receipts.

The study also showed that a mere 7% of consumers consumers are confident that the businesses they are dealing with are treating their data with due dilligence.

According to the UK’s Fraud Prevention Service, CIFAS, identity fraud levels were up by around 10% in the first three quarters of 2010 compared to the same period last year.

Most disturbingly, only 56% of British companies have a comprehensive policy to help protect people’s identities.

People are being urged to regularly check their credit reports and keep an eye on spending on their credit cards and bank accounts. If something looks out of place – get it investigated ASAP!