Did you know that more than 61 million American consumers have a “subprime” credit score? A high-risk FICO score is one that is below 640 according to all three major credit reporting agencies. Having a less than perfect (or even decent) credit score can be due to a number of different reasons: job loss, health problems, divorce, or poor financial management. For many people, it’s the last of these and is a direct result of over-borrowing and over-extending your budget.

Direct payday loan lenders understand that for whatever reason a person has sub-par credit, we all make mistakes. They also know that bad credit comes at a price that can mean paying higher interest rates on credit cards, mortgages and car loans, as well as being turned down for credit and even lost job opportunities. That’s why they don’t look at a person’s credit score when applying for a payday advance loan. Getting a short-term loan for a cash emergency is fine and won’t hurt your credit, but you still need to consider how you’re going to rebuild your credit score and get out of the high-risk category to afford more financial lending opportunities. in the future.

The first step is knowing where you stand with respect to your FICO score. You can do this by requesting a copy of your credit score from the three major credit bureaus: Transunion, Experian, and Equifax. Every American consumer is entitled to a free copy of their report each year. You can request your report either online or by calling directly. Unfortunately, you’ll have to pay to get your FICO Score with your report, but it’s worth it because it’s what defines your creditworthiness. All three reports can vary by bureau and will change over time as your credit history changes. Once you receive all three, please review them individually to verify what has been reported and to make sure everything is correct. Errors on your reports can be costly and affect your credit future, so it’s vital that you check to make sure everything is correct. If you find something that you believe is not accurate, it is important that you discuss it with that particular office immediately. A form should come with your report that allows you to do this.

Assuming your credit score needs help, it’s important that you take steps to rebuild your score and correct any errors on your report. It’s not going to happen overnight, in fact it could take months or years, but be patient and remember that you’re working to ensure your future creditworthiness. While paying off your payday loan won’t raise your score, it will keep you from paying additional interest and fees, and it will free you up to start paying off any other high-interest loans or credit cards. Once you start doing this, your credit score will get a boost. Keep in mind that while payday lenders don’t monitor your credit and don’t report you when you’re paying, if your loan defaults, a third-party collector may take over your account, which means there’s a chance they’ll report. to the credit bureaus. Call your lender right away if you can’t make your payment.

In the meantime, keep checking your credit report(s) to make sure your efforts are reflected in your score. If you see something that is not accurate, be sure to report it. Not only do you want to pay attention to mistakes regarding the debt you’ve incurred, but you also want to make sure you’re not a victim of identity theft or fraud.