Afterpay is surely the current craze among all of us. Since after pay has to buy now pay later approach. Isn’t that interesting? With Afterpay you can quickly buy any goods you want and then pay in four installments for over 8 weeks. But have you ever thought that does Afterpay hurt your credit score?
Afterpay became so famous because opening an account in Afterpay was really easy. It gives the consumers a new way to fund their lifestyle without worrying about long-term debts. But one thing is for sure as consumers become more aware of its services the more questions they ask. Like the impact of Afterpay on their credit score.
As Afterpay continues to get popular and gain traction in the financial market, customers tend to question more about the cost. They are curious to know whether using such a service will affect their credit score. Does Afterpay hurt your credit score? Will they be able to apply for future home loans?
Will if you too have these questions in your mind then you’re have come to the right place. Here we are going to talk about Afterpay and whether it affects your credit score or not. Now let’s not waste anytime and quickly get started.
What Is Afterpay?
Afterpay is perhaps one of the most widely used BNPL services. It will allow you to make purchases without any upfront payments. You can purchase anything from any retailer anywhere in the world just with a mobile app. With Afterpay you get the option to buy the goods from the best brands and retailers like Cotton On, Apple, Billabong, etc.
The best part is you do not have to pay any interest charges. Afterpay was made as an alternative to the credit cards that you use. These BNPL services have gained attention from consumers all over the world. This is because they provide similar protection to credit cards as well.
Also, have a look at the Afterpay Customer Service Number Guide | Everything You Need To Know!
Does Afterpay Do Credit Checks?
Afterpay is different from Zippay where they do not do credit checks before approving the BNPL services. But the company does have the right to run the credit checks. They will also report your activities to the credit bureaus at their own will. The credit card policy of Afterpay states that they will not allow people to access Afterpay if they have pre-existing debts.
Also, read How Does Afterpay Work? Buy Now, Pay Later!
How To Use Afterpay?
You can sign up for a free Afterpay account and then you can easily shop from online retailers. Then you can use Afterpay to make the purchases.
- You need to be of 18 years of age or older so that you can get the authorized holder of the debit and the credit card.
- The purchases that you make should be above $35.
- You will have to make total cost upfront of 25%.
- You will have to pay in four installments for every two weeks till your entire purchase is paid off.
But the question is Does Afterpay hurt your credit score if you use it very frequently?
Also, have a look at How To Use Afterpay On Amazon | Can You Buy Now Pay Later On Amazon?
Does Afterpay Hurt Your Credit Score?
Well if you use Afterpay it will not improve your credit score but yes if you misuse it then it will surely have adverse effects on your credit score. Moreover, Afterpay does not do credit checks and even if you do late payments it will not be reported to the credit bureaus.
You must be wondering What does that mean? Well, this means that any kind of default on the loan or if you missed the payment, then Afterpay will not negatively affect your credit score. Nut if you continuously fail to pay the microloans then it will be reported on your credit score and you may face difficulty when you try to take loans in the future.
Any kind of late fees, poor spending habits will make it difficult for you to get loans from lenders. Even if you signup and use the BNPL services will identify you to be of high risk.
Also, check out eBay Crypto Payment Feature | A Revolution In E-Commerce
So here we have discussed does Afterpay hurt your credit score? You can use these services but do get annoying to some after a period of time. Do give this article a full read and decide it for yourself.
Frequently Asked Questions
Is Afterpay A Credit Card?
No Afterpay is not the same as a credit card. These two are quite different from one another when we talk about the interest and the repayment options. Afterpay will not charge you for any interest and you can make the payments in four installments.
Will Afterpay Rebuild Your Credit Score?
Afterpay does not work like credit cards and it will not report the delayed payments or in-time payments to the credit reporting bureau. So we can say that Afterpay will not help you to rebuild your damaged credit score.