Why does a payday loan not appear on my credit file?

Payday loans are meant for people with bad credit, so payday loan lenders tend to avoid credit checks. This, however is double-edged sword -- you must use creditors that report to a bureau to help rebuild a poor credit history. If a payday loan does not appear on a credit file, it could be a good thing because payday lenders usually only report bad items.


If a payday loan lender does not perform a credit check, your payments will not show up on your credit report, according to LoanSafe.org. Some lenders that perform a credit check may report on-time payments to the credit bureaus, but they are not required to do so.


If you default on a payday loan, the lender could send it to a collections agency. The national credit bureaus frequently scan information on collections accounts, so it will eventually appear on your credit report as a negative item. Collections accounts are one of the worst items you can have on a credit report.

Using Good Payment History

Even if a payday loan does not appear on a credit history, you can still use successful payment to gain credit. Showing lenders that you paid your payday loan on-time could prove to them that you can handle a loan. Also, the payday lender may increase your limit or reduce interest if you have a history of repaying your obligation.


You should negotiate with your lender about an instalment plan or partial payment to avoid a delinquent account, suggests Bills.com. If the lender won't deal, save as much money as possible to pay off your loan or consider settling the account, because payday loans can have triple-digit annual per cent rates.

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About the Author

Russell Huebsch has written freelance articles covering a range of topics from basketball to politics in print and online publications. He graduated from Baylor University in 2009 with a Bachelor of Arts degree in political science.

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