If your provider or lender will approve you for a cash advance without checking your credit score, you shouldn’t have to worry about it affecting your credit report, right? Unfortunately, just like any other loan, cash advances can negatively impact your score if you aren’t prepared to follow the tight terms and conditions.

The Two Types of Cash Advances

Standard cash advances are similar to payday loans; they’re short-term, high-interest loans. Based on the borrower’s monthly income, regular cash advances are popular options among low-credit applicants. Similarly, credit card cash advances are another short-term, high-interest borrowing option. However, lenders don’t determine the outstanding amount based on the borrower’s monthly income; lenders decide how much to loan by taking a percentage of the borrower’s existing credit limit. 

Cash Advances on Your Credit Report

Lenders won’t run a credit check to approve borrowers for standard or credit card cash advances, which means that these unsecured debts don’t actually appear as individual items on your report. However, credit card cash advances will indirectly appear on your credit report by increasing the outstanding balance on the line of credit that you withdrew the advance from. 

How Cash Advances Affect Your Score 

Although a credit card cash advance won’t take up its own section on your credit report, it can still influence your score. For example, if you take out a credit card cash advance of $200, that $200 will increase your current credit card balance. And if your balance was already high or reaching 30% of your credit limit, you run the risk of hiking your credit utilization ratio and lowering your score. 

Because standard cash advances are separate from your existing credit and offered without checking your credit history, they won’t show up on your credit report. However, if you’re unable to pay your debt and your initial lender submits the loan to a collections agency, it can end up negatively impacting your score and tarnishing your credit report for years. 

Financial Advice for Your Financial Future 

Whether you need advice on a current borrowing decision or need professional help consolidating your existing debt, the consultants at Progressive Debt Relief can help you design a system that protects your credit score. For more information on our services, call us today at 1-877-590-1847 or fill out our online consultation application.