Payday loans are very high interest loans made on smaller amounts of money. They are usually meant to be paid off when your “payday” comes, but if you go late, then you can get hammered with excessive fees and incredibly high interest rates. In fact, a lot of payday lenders charge illegally high interest rates! So, before taking one of these out, make sure to check on the legitimacy of the payday lender in questions. 

However, if you do take out a payday loan, will it go on your credit report? Well, in short, it will if you fail to pay it. If you fail to pay, then it can be turned over to collections, and that is when it will show up on your credit report. Having something sent to collections can really do a number on your credit in a negative way. 

On the other hand, paying off a payday loan early does not really improve your credit score, but it can help you avoid a negative penalty. Paying them off at least on time can also give you a better record, because proving that you can and have handled short term loans like this can set you up for banks and credit card companies to trust you more when you go to apply for a bigger loan or line of credit. 

So yes, in a roundabout way, payday loans do go on your credit report, especially if you don’t pay them off!

Moe Bedard
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.