Why buying presents on short-term loans could bar you from a mortgage

They used to be billed as emergency loans. Now they are on offer for everything from breast implants to an indulgent day at the shops. But while borrowers promise themselves it’s ‘just this once’, short-term payday loans from legal loan sharks are fast becoming a black mark on their credit file and a blow to financial health for years to come. Financial Mail has learnt that Experian, the UK’s biggest credit reference agency, has begun categorising payday loans separately from other forms of borrowing when issuing credit reports on bank customers. It means that this Christmas, consumers with a history of using payday loans will be identifiable in Experian’s credit reports for the first time. Banks have been quick to react. One contacted by Financial Mail said it declined loans to any new customers it found had been using payday lenders. Others admitted privately that payday borrowing would count against those applying for loans and mortgages, even years later.....Read more here: Payday borrowers face Christmas credit shock

AAD Previous Blog March 2012: Experian to include rental payments in credit files - allaboutFORUMS