Applying for and managing a payday loan can affect your credit score, both up and down, depending on how it is recorded and how you repay it.
The good news is that checking your eligibility first uses a soft search, which does not affect your score at all.
How a payday loan affects your score
A formal application creates a hard search, which is recorded on your file. Repaying on time can show you manage credit well, while missed payments do the opposite.
- A soft search quote has no effect on your score
- A formal application creates a hard search
- On time repayments can help, missed ones can hurt
How to protect your score
Use a soft search to check before you apply, avoid several applications in a short period, and only borrow what you can comfortably repay. That keeps hard searches to a minimum and repayments on track.
How long a search stays on your file
A hard search from a formal application is typically visible on your credit file for around 12 months, though its effect on your score usually fades well before then. A soft search, used to check eligibility, is only visible to you and has no impact on your credit score at all.
Using a loan to build your credit
Managed well, a loan can support your credit profile over time. Making every repayment on time shows lenders you can handle credit, while missed or late payments do the opposite, so only take on what you are confident you can afford.
How to apply
Borrowing responsibly
Take a moment to check the repayments work within your budget before applying. What matters most is the total cost over the whole term rather than the monthly amount alone, so borrow only what you genuinely need.
Every lender on our panel is authorised by the Financial Conduct Authority, and high cost short term credit is subject to an FCA total cost cap, meaning you cannot repay more in interest and fees than the amount borrowed. If money is tight, free and impartial help is available from MoneyHelper.
Representative Example: £1,000 borrowed for 18 months. 17 monthly repayments at £87.22, final repayment of £87.70. Total amount repayable £1,570.44. Interest total £570.44. Annual interest rate 59.97% (fixed). Representative APR 79.5% (Variable). Any representative monthly repayment shown is for illustration only, based on our representative APR. Your actual repayments will be confirmed by the matching lender if your application is approved.