On their own, payday loans aren’t actually a bad credit issue and don’t reduce your credit rating if you’ve paid them back on time.
The problem when it comes to mortgages is that lenders see payday loans as a red flag, and that’s why it can be more difficult. Mortgage lenders carry out a detailed analysis of your credit report before they agree to give you a mortgage, and will look for bigger credit issues such asCCJs, IVAs and bankruptcies.