Any Help/Advice for giving info to an online Payday loan "company"?? (Union: good credit)

[nikkat10]

Need help! Gave my info online to a loan agency that I thought was legit! I'm young and need to build credit - FYI it was Sigma Solutions - I had no idea!! Really dumb mistake on my part! Now I need to know what these charges wil show up on my statement as and if there's any way to stop them?? I knew they would give my PH # to other co they have relationships with but am worried now they will also give out my acct info??

[belleislerunner]

The easiest way to build credit it to save $1,000. Go to a bank - take out a loan for 1,000. Pay off the loan in 3 months. Repeat.

If you go to www.annualcreditreport.com you can get a free credit report from each of the 3 bureaus (Experian, Equifax, and TransUnion) once a year. Make sure you use that website and not any of the "free credit report" ones which are not free and charge fees to prey on your insecurities. See the FTC's website. The Federal Trade Commission's Information on Free Annual Credit Reports

Another hint - rather than getting all 3 free ones today (as you only get one free one a year) - get one free one from each of the agencies every 4 months (e.g. Experian today, Equifax in September and then TransUnion in January) - Then you only go 4 months without seeing your credit. All three will pull the same information.

And never go to a payday loan company. They're out to rob you. Stick with a bank or credit union - even their unsecured credit lines will be lower.

[SquareBetterThanAll]

Originally Posted by belleislerunner

The easiest way to build credit it to save $1,000. Go to a bank - take out a loan for 1,000. Pay off the loan in 3 months. Repeat.

That would work if it was 5 years ago. However, many banks no longer offer personal/signature loans, and of those that do, even fewer will offer them to someone with little to no credit.

Even so, one doesn't need to save $1000 to go get a loan - they would get $1000 as the proceed from the loan, which they would use to pay it back. Say the loan had an interest rate of 10% annually, three months of which would be [($1000*.10)/12]*3 or $25 (that's not a perfect calculation as we're not taking into account a declining balance, etc.). Of course you're also assuming there's no origination fee or prepayment penalty, which may or may not be the case (these days, its likely there is one or the other). But assuming our simple scenario, the OP would only need $25 (to cover the interest) to be ok getting the loan.

The tried and true path for younger people getting started is to get a low-limit credit card. Of course those are hard to get now (and people under 21 will soon need a 21+ cosigner), but some banks or store cards will still approve people with no credit for a no annual fee card. Then they would need to make a few minor purchases a month, pay it off in full at the end of the billing cycle, and repeat. That would be sufficient to establish credit with no out of pocket cost. Of course if they can't get an unsecured card, there are secured cards that require a "down payment" if you will; however they usually involve fees and are generally geared towards people who have wrecked their credit.

As far as the online payday advance place (or in person, whatever) - steer clear. If they simple have your info it's not a big deal, however if a loan was initiated or you/the other person gave them your checking account info, that could be bad. The other assumption is that this place is going to be helping you build your credit by reporting it to the credit bureaus which is not necessarily an accurate assumption. Either way, the cost of these loans makes them a very bad way to go about building credit (or borrowing money).

[mrymrgrt]

Stay away from the payday loans if possible. I know from experience. It is one big cycle. When you pay your loan back you need to reborrow to pay the bills. We are elderly and on fixed incomes. We had to borrow from payday to pay unexpected car repair. We do not have good credit due to large medical bills so nobody will give you a loan. It is very hard to break the cycle...and very, very expensive in the long run!!