Not only can you get a payday loan with bad credit score; payday loans can also help you build your credit rating.
What happens if your credit score is bad?
Failing to pay that debt or interest as when due could become detrimental in the future, especially when you really need a credit to bootstrap a great idea, expand that booming business or even take advantage of a rare opportunity to acquire an asset at a discounted price. More so, all banks have begun implementing the Global Standing Instruction (GSI), which is a policy of the Central Bank of Nigeria (CBN) that ensures that money owed by a borrower in one bank can be repaid through a set-off/take-over of the borrower’s money in any other bank in Nigeria. This is possible as all bank accounts of every customer are now linked through Bank Verification Number (BVN), which can easily enlist all your accounts irrespective of the bank in operation.
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What to do if your credit score is bad?
A bad credit history reveals defaulted payments and missed principal repayments to any lender who investigates your record at any of the credit bureaus. As you may know, banks (including microfinance banks) are mandated by the CBN to render information on all bad credits and the defaulters to at least two of the three credit bureaus, who make such information available to any of the financial institutions that request for it through their search offerings. This narrows your loan options, however, there are other opportunities for access to credit such as the “Payday” loan.
Payday loans rarely consider credit history during assessment, therefore in the case of a bad credit score, eligibility to apply either through a traditional lender or instore provider is not altered. This usually happens when the lender takes advantage of the business owner’s credit history or associated credit score when pricing the loan, as the credit history has a limited impact on the decision to grant you a payday loan. Again, this does not undermine the importance of credit history, especially as it may significantly impair the ability to get other types of loans, including business loans, asset finance loans, mortgages amongst others.
Compare rates from different lenders and choose the right payday loan that offers the best terms here.
Payday loans can help you get a good credit score!
Interestingly, whilst most lenders, if not all, will approve a payday loan despite a bad credit score, it presents the opportunity to repair credit image and improve credit history. As you pay off your payday loans, which are often automatically set off against your salary or other predetermined time-based cashflows (usually your next paycheque or cash inflow), your credit history is being rehabilitated, with the hope of rebuilding strong history overtime. Even so, records of payday loans are not rendered to credit bureaus, they can become your reference points, especially if they are taken from conventional banks.
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