Your credit record affects all the aspects of your life and not just finances. Bad credit record can create problems for you at the time of purchasing a property or car, applying for credit cards and in few cases, a job. Hence it is important for you to keep your credit record clean.

Due to unfortunate events, if you find your credit record has gone bad, take action to rectify this problem immediately. An intelligent beginning can be made by asking the credit-counseling agency for assistance in repairing your credit. These agencies are staffed by trained and experienced people in the area of credit. But do not lose sight of the fact that these people will only help you sort out the problem but will not actually do the deed. You may have to do some work to get your credit record back on the track.

Another smart thing to do is to ask for your credit report and rectify any errors in it. This method is not only easy but is highly efficient method of making you aware about your credit and informing you about your credit status. Get the credit score from Trans Union, Experian and Equifax. Most of the times, some erroneous information is present in the report, harming your score. If you notice any such information, send a letter to the credit bureau immediately, pointing out the mistake and informing them of the corrective action.

Simply by repaying the outstanding debts is the best method of wiping off bad credit. This may not be so simple since lack of funds is the reason for bad credit. But you can easily enjoy a life without debt and good credit rating. To enable you to do that, prepare a budget. Make a list of all your expenses that consists of your daily living expenses and monthly bills. Now check it against the income. If your expenses exceed your income, trim down your expenses as much as possible.

Paying your bills on time is another vital step in repairing damaged credit. If you can show stable income and timely payment to lenders, your credit record will show a marked improvement with 2-3 years. Restrict the number of credit cards you use or possess. Stay away from bankruptcy, tax liens and collections at any cost. You can request your friend or relative to co-sign a small loan to enable you to repay the old debts.

Adding positive reports to your credit history will also help you overcome the stigma of bad credit. You can do this by opening a new savings account, getting a low interest credit card and keeping a low balance. Refinancing with a home equity loan to repay the old debts will also add positive reports to your credit history.

Repairing bad credit is not an impossible task but is quite time-consuming. It may take 5-7 years to get your credit record back on track. Your credit score might show marginal improvement, as you go on using the process of repairing your credit, but the damage done to your credit will not be undone quickly. However, patience brings its own sweet rewards and at last you will be free of the stigma of bad credit.

Payday loans are short-term loans that are available as a cash advance against your paycheck. You have to show the lender the proof of the salary and give a postdated check, whose date is generally a month after releasing the loan. There is no credit check to get this loan approved.

Payday loans are lucrative financial solutions in case of emergency, when you have a short-term cash crunch. However they can be very risky for the inexperienced borrowers or the people who cannot control their cash flow. Fees that initially appear to be low and affordable can grow into a huge amount within a few months. Some loans carry an APR starting from 300% to a very steep 600%.

Though not a bad alternative, they can easily go out of control. While they offer short-term cash solution, they also carry high risks that at times can be far more than the benefits.

Remember these 7 tips why you should keep the payday loan as the last option.

1. The net amount you get is lesser than the amount written on the check. The lender will take finance charge from the loan amount as his profit. This charge is generally $15 to $50 per $100 during the pre-determined duration of the loan. You have to draw a check with the loan amount + fees. If you fail to comply, you will have to pay stiff finance charges.

2. The account balance may fall short of the check you have issued to the lender. Once the loan is due and you fail to pay, the lender will generally persuade you to roll or renew the loan. Now you have the burden of bigger loan with late fees and extra finance charges. You might even use the borrowed money to pay the steep fees.

3. The state regulations stipulate that the loan term should not exceed 30 days. But the lenders sidestep this issue by giving loans whose term is at least 31 days, putting you at the lender’s mercy.

4. Payday loans are emergency loans and are supposed to be repaid quickly. But most of the times, this does not happen. Since the borrowers consider this type of loan cheap and convenient, they let it roll over. This causes the loan amount to swell unless the borrower has sufficient funds to repay the loan at once.

5. Payday loans are risky as they are meant for people with low-income, who would not get the normal loans. Lenders ignore the fact that people who already face cash crunch will experience more problems in repaying the loan.

6. Some payday loan sites automatically ‘roll over’ a loan and charge the renewal fee on the date of the expiry of the loan. Other sites necessitate the borrowers to accept a contract that prevents the borrowers from filing bankruptcy or taking legal action against the lender. This means the borrower shields the lender.

The payday loans can be addictive and become a regular option instead of the emergency one, if there is no other means of funding. Due to their easy availability and approval, these loans can be tempting.

If there is a need to borrow against your pay, ensure you get all the facts straight and understand the downside of the loan. Try to search for the lender offering the lowest rate and find out about the various fees included in the loan, to get an idea of the exact amount you will get, the final amount you will pay and the time limit.

If there is a problem due to payday loans, consult institutions offering or low-cost aid in negotiating and lowering the interest charges and effectively your monthly payments. You should also improve your money-handling skills to reduce or eliminate totally the necessity to take these loans to meet the expenses.

Payday loans are excellent short-term solutions to meet urgent money needs but if you throw caution to wind, you can sink deeper into the debt trap that can become a liability. To minimize the risk of a payday loan provide for adequate funds to repay the loan when the due date approaches and pay on time.

You can easily get a same day payday loan only after 24 hours are over. It is extremely rare that you get the same day payday loan on the same day on which you have applied for it. Generally there is a time lag of 24 hours before the money is transferred into your account. Most online and offline payday loan companies make this kind of false advertising. But what many do not know is that these companies define a day as 24 hours or a full day.

After you apply for a same day payday loan, major portion of the day is usually spent waiting for the fax or a call informing you that the loan is approved. All the loans have to be approved before further processing, irrespective of how urgently you need the money and the advertising of the payday loan company assures you.

At times, the loan approval can be very time consuming. It involves faxing a blank check along with your identification to the payday loan company. You first have to photocopy the ID and that can mean the trip outside your home. If that happens, you can simply visit the payday loan office closest to you to save time.

Once you have sent across your ID and a blank check, you may have to wait for the approval. The same day payday loan company may call up your employer to find out if you are still employed. They use this method to verify that you are employed and your paycheck will repay the money lent to you by the company.