 TITLE: What Happens If I Stop Paying My Payday Loan? CONTENT: How Payday Loans Can Impact Your Credit\n---------------------------------------\nPayday loans are not listed on credit reports. Payday lenders don't usually conduct credit checks on applicants, so applying for one won't show up as a hard inquiry on your credit report, and they won't notify the credit reporting agencies when you get one. Because these loans fall under the radar, they neither help nor hinder your credit history if you pay them off as agreed.\nThat all changes when the account goes delinquent, however. Fall behind on payments and the lender may sell the account to a third-party collection agency. At that stage, the bad debt will almost certainly show up on your credit reports because most collectors furnish information to the credit reporting agencies. If that happens, it will stay in your credit file for seven years and be negatively factored into your credit scores. Payment history is the most important credit scoring consideration, and when an account goes into collections, it's a clear indication that you didn't pay your bill as agreed. As a result, your scores will sink.\nSome payday lenders deal with people who flee from their obligations by filing a lawsuit. If the lender wins the case, a judgment will be filed. Experian does not list these judgments, but other credit reporting agencies do, and they will list it in the public record section of your credit report. There it will stay for seven years from the date it was filed. END