Probably not. Payday loans generally are not reported to the three major national credit reporting companies, so they are unlikely to impact your credit scores. ... Debts in collection could hurt your credit scores. Likewise, some payday lenders bring lawsuits to collect unpaid payday loans.

How long do payday loans stay on credit report?

Payday loans stay on your credit file for six years, and as more time passes, the less impact they will have. Payday loans are short-term – generally comparatively expensive – credit agreements, that have to be repaid within a month.

What is the major downside of a payday loan?

Payday Loans Are Very Expensive – High interest credit cards might charge borrowers an APR of 28 to 36%, but the average payday loan's APR is commonly 398%. Payday Loans Are Financial Quicksand – Many borrowers are unable to repay the loan in the typical two-week repayment period.