People who are credit challenged may find themselves looking at a fast cash payroll loan when searching for financial help. Their search may not have been their initial direction. After receiving multiple rejections, the course led them to an application page online. Not only are the short-term loans convenient, open to those with current credit challenges and provide fast cash but they can also be safe and cost effective. Appealing!
Payroll loan lenders often receive applications from applicants experiencing credit challenges.
If your financial troubles led you on a straight and narrow path to a safe payroll loan application, you may want to take a look at what pushed you in that direction. There are definite financial mishaps which can easily cause a person to be credit challenged.
1. Late payments – Missed payment dates are a leading factor for creating financial problems. Some people don’t pay enough attention to the time sensitive due dates. The creditor may not cancel your credit when you miss a payment, but the expensive late fees and negative reports to credit bureaus will get other creditors to look at you less creditworthy.
2. Filled credit limits – If you maintain your balances close to the limit, not only are you wasting money each month on interest charges but you are hurting your credit score as well. Large amounts of debt will negatively affect your credit utilization rate.
3. Minimum payments – it is exciting to think that you can use a credit card and then only have to pay a very affordable minimum payment. The unfortunate part is that this small monthly payment pretty much only covers the fees leaving the principle balance to accrue new charges for the next term. Because credit cards are revolving accounts, a person can continue to spend money each month as long as they don’t go over their credit limit. With higher balances come higher minimum payments and wasting larger amounts of income towards interest charges.
4. Use credit card cash advances – Creditors charge higher interest rates on cash advances. The interest charges begin as soon as the money transaction occurs. The cash advance will also use up your purchasing limit. Keep purchases and cash advances separate, use a bank or payroll loan lender instead.
5. Increase credit limit – There is a right and a wrong time to request an increase in your credit limit. The creditor will need to make a hard inquiry on your credit to review creditworthiness status. Because hard inquiries can negatively affect your score, you may want to protect the score you have for additional financial needs.
6. Closing credit cards – Some people have no spending control. In order to keep from reusing their credit card cancelling the account seems to make the most sense. On the contrary, closed accounts hurt credit scores. Your credit is based on many items and longevity of credit history is an important one. Cancelling a card which has been open for a while will hurt towards the longevity aspect as well as change the balance between total balance due and potential balance possible.
Try to avoid these common mistakes in order to keep your credit worthiness. When unexpected costs occur it will be good to have multiple available options rather than only finding relief with an online payroll loan advance.