How Long Does A Payday Loan Stay On Your Credit Report


Taking out a payday loan is a quick fix when you need a cash advance in a hurry. That being said, they are extremely expensive and so you will likely end up paying back a lot in interest. The idea of a payday loan is that you borrow a smaller amount of money, with a higher interest rate and pay the loan back in full, usually around 30 days after initially borrowing. Although, it is becoming more and more common for payday loans to be spread over a longer period of 1 to 6 months. 

With a loan that takes place over such a short period of time, one would imagine that the effect on your credit report might be short term as well. But is this the case? In this article, we are going to look at the effect a payday loan might have on your credit report as well as finding out just how long they will appear on there.

How Long Does A Payday Loan Stay On Your Credit Report?

As we mentioned, it might be easy to assume that a short term loan such as a payday loan would only have a short term effect on your credit score, but that assumption would be incorrect. Payday loans remain on your credit report long after you have paid the loan off.

A payday loan will remain visible on your credit report for six years after it has been paid off in full. Provided that you have not defaulted and the loan has been fully paid within the specified period, the loan will not have a negative impact and will show on your credit report as having being paid in full. This, over time, can be a good reflection on you and show that you have a responsible borrowing history. Whilst payments are being made, the lender will regularly update the information on your credit report to reflect the state of borrowing at that time. Again, as long as you are making regular payments and doing so on time, there is no reason to be concerned about this. However, if you are regularly missing payments or fail to pay in full on the date specified, this will negatively impact your credit score and will remain on your credit report for potential lenders to see in the future. If you have a negative note on your credit report, this will also remain visible for six years. This will greatly affect your ability to borrow in the future.


Sometimes a payday loan is unavoidable and can be somewhat of a lifesaver when we find ourselves in financial dire straits. But it is important to keep in mind that the effect of these types of loans can stay with us for much longer than the actual loans themselves and so you should carefully consider whether it is essential that you take out a payday loan or whether you might be able to manage without one. This type of loan will stay on your credit report for six years after the information has been recorded on there, and this is a lengthy-time period, especially if you are looking to obtain further credit in the future.