Tag Archives: financial
Facts About Payday Loans And Credit Score
Everybody knows that payday loans and cash advance loans are probably two of the few financial products that do not require credit verifications to qualify for them. Though credit has little to do with the qualification process of payday loans and cash advance loans, there are still interactions between these loan products and your credit score and history. It is very important to know them if you are interested in keeping a healthy financial life.
These interactions may have nothing to do with approval but have implications on the qualification process of other financial products like credit cards, personal loans and even secured loans like home mortgage loans or home equity loans. So, as you can see, it is important for you to know them because your future financial life can depend on the use you give to these loans and their relation with your credit score.
Positive Interaction For Raising Credit Score
It may sound strange but even though payday loans are meant only for an emergency situation, they can be a great tool for recovering your credit if used properly. Since most of the lenders that provide this kind of loans report to all major credit bureaus, it is possible to obtain one of these loans that do not require credit checks and take advantage of the fact that the lenders report to credit bureaus to get positive inputs on your credit history.
Even though the approval of the loan will not have implications on your credit report because no credit checks are made, the timely repayment of the loan will be recorded into your credit history and thus, a positive entry will be added to your credit report. However, bear in mind that payday loans do not have long repayment programs and thus, a single or two entries will be reported during the repayment of a payday loan. Personal loans with longer repayment programs are far better for this purpose, however, you may need to request a few payday loans before you can get approved for a personal loan if your credit score is not that good.
Negative Effects On Credit Score
There are some reasons why payday loans can affect credit score negatively. The mere fact of getting a payday loan will not affect your credit score but if debt keeps accumulating it will affect your debt to income ratio which will, in turn, affect your credit negatively. Thus, you should avoid using payday loans as a common source of financing because that is the main reason why debt accumulates: people fail to raise the money to repay a loan and so, they take another loan to repay the previous one.
Also, payday loan lenders report to credit bureaus, as explained above, and if the timely repayment of the loan gets recorded into your credit report as a positive entry, the lack of payment, or late payment will also be recorded into your credit report but it will affect your credit score negatively. As you can see, just applying for a payday loan will not affect your credit but what you do with it and how you repay it can have either positive or negative effects. Thus, be careful.
Books on loans
Personal loans and all the terminology that comes with it can make your head spin after awhile. However, it is very important to educate yourself with the ins and outs of personal loans if you are thinking obtaining one for any financial cause. Doing so can help ensure you get the best personal loan for your goals as well as prevent heartbreak down the road for you.
There are many wonderful reports on the market today offering knowledge on loans. Several of these reports are a great investment for ensuring you will make solid financial choices in the area of personal loans after arming yourself with the facts of the industry.
The “Beginners Guide to Real Estate Investing” by Gary W. Eldred is of course geared about real estate. However, it does have excellent information regarding personal loans. If you are considering a personal loan for real estate related issues including fixing up homes, then this report will give you quality information in both areas.
“The Book of Inside Information” explains the world of loans in very simple terms, making the process much simple to know than books full of industry jargon. This book is a great financial resource. In addition to providing you will knowledge about personal loans, it discusses the areas of family finances and managing family spending. One of the newest books out there is “The 21st Century Family Legal Guide: The Law You Must Know to Protect Yourself and Your Family”. This book is more technical, but still offers excellent information on personal loans.
In addition to quality books offering you information about personal loans, there are a few that provide you information on how to pay off debt, including credit cards and personal loans. “Live Debt Free” (3rd Edition) is full of level headed tips for doing so. This isnt a report that promotes pyramid schemes or get rich quick schemes. Instead, the book offers forward budgeting and money management tips to help individuals devise a realistic plan that fits their income. The plan will help individuals reduce their debt in the areas of credit cards and personal loans.
Quality papers including Readers Digest and Money Today often run articles on types of loans. You can research the net to find great articles from these magazine and many others that discuss personal loans. Dont forget to look for reviews including those published by the National Consumer Council on the issue of loans.
Personal loans are a very good financial tool when used properly. Take the time to read some quality books in the area of personal loans to have the knowledge a strong understanding of how the process works. To get the best results, choose books that are unbiased. You want to read the good, the bad, and the ugly about personal loans.
The more you know, the better decisions you can get regarding your financial dealings with this financial tool.
If you already take personal loans, consider reading books that provide excellent information for ensuring those loans are repaid as well as how to eliminate personal loan debt with effective debt management systems. The information is very straightforward and worth investing your time and energy into reading. The internet is a great place to search out such important books on the issue of personal loans. You can also ask for them at your local library.