Yes, you can use payday loans to fix bad credit. There’s a strategy many people use to do just that. Remember, though, you must stick to the plan. If you do, you should see improvements in your credit score much sooner than you expected. Here’s the strategy laid out for you below.
The first part of the strategy is to come clean about all of your existing debts. Write down all of the accounts that you owe money on. Use exact and current numbers, don’t round down or estimate. Put the ones you’re late on at the top.
The second step is applying for a payday loan. Read through the details and reviews of the payday loan sites listed on this site. Apply for the one you feel is best for you. Most likely they will not do a traditional credit check and they also won’t report the new debt to any credit reporting agencies. This is good because your poor credit won’t affect your ability to get a payday loan and taking out this payday loan won’t hurt your credit any further.
When you apply for a payday loan, request the amount of money you owe that’s past due. Make sure that it’s not too much to pay back later, you don’t want your payday loan to go past due too. If you’re past due amount is too much, apply for the amount you’re comfortable paying back.
Next, when your payday loan cash is deposited into your checking account, pay off your past due debts. These accounts will no longer show as past due in your credit report and your creditors will be satisfied. This is where discipline and sticking with the plan comes into place. The payday loan cash is only to be used to pay your past due debts.
Next step is to pay off your payday loan with your next paycheck. Hopefully you only took out a payday loan in the amount you were comfortable paying back on your next payday. Of course, there is a fee to take a payday loan but consider this a fee to fix your credit. If you’ve followed these steps as outlined, your credit has already improved.
Lastly, if you were not able to apply for a payday loan in the amount of all your past due payments, repeat the steps above until your past due debts are paid off. It’s ok to have debt, it’s not ok to have past due debt payments. It’s these past due payments that will hurt your credit the most.
By following this strategy of using payday loans to catch up on your past due payments, your credit will improve. Mostly likely you still have debt, just not past due debt. Come up with a long-term financial plan to save and pay off all of your debt over time. If you ever fall behind again, you now know you can use payday loans to pay off and, better yet, avoid having any past due debts at all.