Skip to main content

If you have bad credit, you are not alone, and you are still eligible for a payday loan. Many lenders are dedicated to providing loans to those with poor credit, and some lenders offer loans without checking your credit record at all. 

One consideration, though, is that the interest attached to your loan may be higher than the rates offered to a borrower with stronger credit. 


Key Points:


  • A credit score represents your past financial behavior and indicates how reliably you have paid off debts in the past. 
  • Your credit score is a number between 300 and 850, with the higher end symbolizing a stronger financial record. The average score in the US is around 675. 
  • You can check your credit score via the FICO website or Credit Karma.
  • Often, lenders will offer loans with a higher interest rate to candidates taking out a bad credit personal loan.
  • Failing to pay your loans off promptly will further damage your credit score. 


What Is A Credit Score?


A credit score is a number between 300 and 850 and reflects how reliable a borrower you have been in the past. The higher your score, the better, as this indicates that you have paid off bills and debts promptly and fully previously. 

Your credit score is made up of many factors. If you have taken out payday loans before, your reliability in repaying it will be reflected in your credit record. This is accompanied by your history in paying off credit card debts, phone bills and more. 

When you apply for a loan, your prospective lender will (in most cases) want to know who they are lending to. By accessing your credit record, a bank, lender or credit bureau can view your financial past. 


Credit score from paying off credit card

Credit scores are based off past financial reliability, such as paying off credit card debt.


How Can I See My Credit Score?


You should be aware of what your credit score is by checking it online. By keeping track of it, you can identify possible fraud and, importantly, be motivated to continuously improve it. 

You can check your credit score online through websites such as FICO or Credit Karma. Many loan providers even offer a credit check as part of their services.

To understand your credit score, you need to understand that the 300-850 scale is a spectrum, and when you improve your financial habits, your assigned score will climb. 



Am I Eligible For A Payday Loan If My Credit Score Is Low?


The simple answer is yes – a low credit score does not exclude you from securing a payday loan. If you find yourself with a credit score below the mid-500 mark, you may wish to approach the loan process slightly differently. 

If you have credit below around 580, you may wish to apply for a no-credit check loan. This simply means that your lender does not base their lending on borrowers’ credit scores, and therefore your credit history is not a factor. 

You will not necessarily require a no-credit check lender. You could approach nearly any lender, and many would be happy to lend to you despite your lower score. However, if you’re pressed for time, it may be best to head straight to a lender who offers no credit loans. 


Will My Bad Credit Impact The Terms Of My Loan?


Yes, it could, but that’s okay. If you have bad credit, it essentially means that you haven’t been the most reliable consumer and borrower in the past. While you will still be able to secure a bad credit loan, it may be slightly more expensive because of your credit score. Average APR on payday loans is already a substantial 400%, meaning it could be even higher for those with imperfect financial pasts.

For lenders, it is more risky to put their money in the hands of borrowers who have been known to default on payments. As such, they may charge higher interest on loans to such borrowers. As long as you pay back your loan as quickly as possible, this shouldn’t be too damaging, but it is something to keep in mind. 


Will My Bad Credit Impact The Terms Of My Loan?

Your credit score is a number between 300 and 850 – the higher, the stronger!


Can Repaying My Loan On Time Improve My Credit Score? 


In the long run, yes it can! Improvements to credit scores suffer from a time lag, and so your score will take a while to reflect your credible behavior. Nevertheless, by paying off your loans fully and when you agreed you would, you are on your way to a stronger credit record.

Having a high credit score will help you attain future loans, credit cards, and even a mortgage, so get improving! 


How Can I Improve My Credit Score?


If you have bad credit, there are a few things you can do to improve your credit score:

  • Pay your bills on time.
  • Keep your credit utilization low.
  • Lengthen your credit history.
  • Avoid applying for too much credit.
  • Dispute any errors on your credit report.
  • Consider getting a secured credit card.
  • Consider getting a credit-builder loan.