There is a lot of confusion about taking out a payday loan. While it is true that you can get caught up in a cycle of debt with them, that can happen with any type of revolving credit. The important thing with any type of credit is to use it wisely and never take out more than you can comfortably pay back when it is due. If you have had a bit of trouble in the past and need to find a way to improve your credit score, a payday advance loan can be just the answer. Here are a few ways they help you:
Reporting to the Credit Companies
Though not all payday loans report to the big credit reporting agencies, some of them do. Look for a loan company that does report to the agencies and take out a small loan. You do not even need to wait until it is due to pay it back, just wait a few days and then go and pay it off. In a month, check to see how it affected your score. You can then do it again if you still need to improve your credit rating.
Stay Current on Credit Cards
Paying your credit cards on time is a sure way to improve your credit score. If you have a bill that is due before you will be paid, take out a payday loan and make the payment on time. As soon as you do get paid, make sure you pay off the loan. While it will cost you a bit of money in interest, the fact that you are keeping a good credit rating will prove to be important over time.
Maintaining Good Relations with Your Landlord
Many people do not realize that when you are late on your rent payments, it can be reported to the credit bureaus. This will not only lower your rating, but can keep you from being able to rent a house in the future. In many cases, the late fees you would pay to the landlord will not be as much as the interest rate on a payday loan. Of course, if the loan interest is more, it will still be beneficial to spend a bit extra to keep a good relationship with the homeowner.
Do not be put off by any bad propaganda about payday loans. Do your own research and find out which company can serve your needs best. Make sure you understand the terms of the loan and pay it back with your next paycheck. They are called payday loans for a reason. When used properly they can be a big help to you financially.