What Does Your Credit Report Say About You?
A credit report is a detailed document of a person’s borrowing history. There are three primary credit bureaus who prepare these -Equifax, Experian, and TransUnion- when lenders and/or debt collectors report their lending activity to a borrower. They also report late payments, defaults, and complete repayments. There are also secondary credit rating agencies who prepare such reports. However, not every type of loan gets reported, neither every lender reports.
Based on the inputs from the lender/ collector the bureaus prepare the report, and to quantify the quality of the credit status of a borrower they assign it with a number. It is called a credit score. A credit score can be anything between 300 and 850. Those can be classified as-
Excellent: 750 or more
Good: 700 to 749
Fair: 650 to 699
Poor: 550 to 649
Bad: 550 or less
Depending on the type of the loan you apply for, lenders want you to have a score level. For example, a mortgage lender wants its borrowers to have an excellent score. Similarly, a payday lender does not mind even if it is bad. A higher score always helps the lender establish trust with the debtor, though. A high score suggests that you repay on due, while a bad credit shows you make late payments or default loans. That is why, your credit report is an important document.
Do Online Payday Lenders Report to Credit Bureaus?
Usually, payday loans are not big loans. When a borrower can avail maximum up to $1,000, credit scores hardly matter. Both store-based and online lenders do not check the credit while approving loan applications. Similarly, most of them do not report this to credit rating agencies. The only time such a situation occurs when a debtor defaults the loan and the lender assigns a debt collector to collect the repayment.
When the borrower does not come to an agreement on a new repayment or the alternative due set by the collector -or agrees but fails to pay- the debt collecting agency might report a loan default to the credit bureaus. In that case, it might hurt your credit rating. After that, taking out a payday loan may get difficult. So pay your debts on time, or ask your lender for a rollover. Or choose lenders like EZPaydayCash where you can pay back your debt in installments.