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  • Writer's pictureDonnelle Brooks

Does Using Afterpay Affect Your Credit Score?

With so many people using Afterpay as a quick credit service, many people are wondering if it will affect their credit score. The millennials that uptook the service and made it popular are now wanting to enter the housing market and thinking: "uh oh". If this is you, read on - it's not all bad news.


Does Afterpay perform a credit check?

The key distinction with Afterpay is that they do not perform a traditional credit check when you use their service. This means that your credit score is not impacted by using Afterpay, and they don't report your payment behavior to the major credit bureaus. As a result, responsible use of Afterpay won't directly improve your credit score either. If you want to know more about Afterpay, have a look at our comprehensive article.

However, it's important to note a few things:


Late Payments

While Afterpay doesn't report to credit bureaus, they do have their own internal system for tracking late or missed payments. If you fail to make a payment on time, you might be charged late fees and your account might be restricted from making further purchases until the issue is resolved.



Spending Habits

Consistently using Afterpay and other similar services to make purchases could potentially lead to overspending if not managed carefully. This could indirectly affect your credit score if you end up accumulating debt that you struggle to pay off.


Impacts on Future Borrowing

While Afterpay itself might not directly impact your credit score, if you have a history of using these services irresponsibly and accumulating debt, it might affect your ability to qualify for traditional credit products in the future. Lenders often consider your overall financial behavior, not just your credit score, when making lending decisions.


Will using Afterpay affect my ability to get a loan?

Using Afterpay on its own is unlikely to have a significant impact on your ability to get a loan. Afterpay and similar "buy now, pay later" services typically do not report your payment activity to credit bureaus, which means they don't directly affect your credit score or credit history that lenders usually consider when assessing your loan application.

However, there are a few potential considerations:


Debt-to-Income Ratio

If you consistently use Afterpay or other similar services and accumulate debt, this could impact your debt-to-income ratio. Lenders often consider your debt-to-income ratio when evaluating loan applications. If your debt obligations, including Afterpay payments, are too high in relation to your income, it might affect your ability to qualify for a loan.


Responsible Use

While Afterpay itself might not directly impact your loan eligibility, if a lender looks at your bank statements and sees frequent Afterpay payments, they might interpret this as a sign of potential financial stress or irresponsibility. On the other hand, if you've been using Afterpay responsibly and paying off your installments on time, it could potentially showcase your ability to manage multiple financial obligations.



Overall Financial Behavior

Lenders consider various factors beyond just credit scores, such as your employment history, income stability, existing debt, and more. This adds up to a whoel picture known as creditworthiness. If your overall financial behavior shows responsible money management and stability, it can positively influence a lender's decision.


The Bottom Line: will using Afterpay affect my credit score?

Remember that every lender has their own criteria for evaluating loan applications. While using Afterpay alone might not be a major factor, it's important to manage your finances responsibly and maintain a good financial track record. If you're planning to apply for a loan in the future, consider how your overall financial behavior and obligations might be perceived by potential lenders.

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