www.iva.co.uk

This needs pointing out as i made a very silly mistake in septmber.

Knowing in september that in January my IVA was coming of my credit file i was as always doing everything possible to increase my credit rating for a mortgage.

So i took a pay day loan, i didnt need the money, i borrowed £150 and 6 days later paid it back in full inculding interest was £195, yes £45 alot but the theory was that it would increase my credit rating which it did, but what a mistake if your mortgage application goes to an underwritter depending on the bank it is an instant no if you have had a pay day loan in the last 6 months or some even 12 months

Jimmy123 your quite right. My son works in the mortgage department of a high street bank where Payday loans are an instant refusal for a mortgage application.

Whether the loan is paid off next day or next year it matters not and they are also not concerned with how long ago the loan was made.....its an instant refusal.

Pay day loans have their purpose but not as a credit builder clearly! They have a impact on future credit facilities and if not careful can ruin your finances further ...think twice !

Good advice there!

Do they stay on the credit file record for 6 years as well, even if paid off in full ?

yes they stay on for 6 years

...you might be better off opening a card-based bank account such as 'Cash Plus' or 'Clear Cash', both of which have credit-builder facilities built in.

Worth a look.