Does Affirm Impact Your Credit Score or Show Up on Your Credit Report? (2024)
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If you're just checking to see if you prequalify to use Affirm, it won't impact your credit score. Many people also want to know if Affirm shows up on their credit report.
By Jennifer Farrington
Jan. 17 2022, Published 11:30 a.m. ET
Affirm is a buy now, pay later service. Instead of having to pay for an entire purchase upfront, Affirm gives you the flexibility to buy your items now and pay for them over a specified period of time, similar to how a credit card works.
Let’s say that you want to buy a pair of Apple AirPod Pros but you don’t want to dish out $200 upfront. If approved, Affirm will allow you to finance your Apple accessories and spread out your payments over a 3-month, 6-month, or 12-month period. By using Affirm, you’re able to keep more money in your pocket and get the things you want. So, how does Affirm work and does it impact your credit score?
Affirm won't impact your credit score, but it uses this and other factors to determine eligibility.
Unlike some buy now, pay later companies like Quadpay or Four, Affirm uses your credit history and credit score to determine eligibility. Thankfully, the company will only perform a soft credit check (also known as a “soft pull”) to determine if you’re eligible to take advantage of the financing options it offers.
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A soft credit check is when a lender or another party like an employer checks your credit score and history without actually impacting it. Many credit card lenders that pre-approve you for a line of credit will conduct a soft credit pull to determine if you meet their eligibility criteria.
Although Affirm doesn’t require a minimum credit score, the company will review your credit history and score before extending financing options to you. Also, Affirm will consider your payment history with the company (if you used Affirm in the past). If you failed to make payments on time or frequently missed them, Affirm might not extend any financing offers to you when you reapply.
If you want to use Affirm, there are a few ways you can do this.
1. Find a store that accepts Affirm as a payment method and start shopping.
Some top retailers that accept Affirm include Apple, Walmart, Target, and Best Buy. After you complete your shopping and check out, select Affirm as your payment method. You’ll be prompted to answer some questions, which will determine if you qualify to shop with Affirm.
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In the event that you do qualify, the company might allow you to spread your payments out over 8 weeks with installments being made every 2 weeks or it might allow you to choose whether you want to make monthly payments.
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2. See if you prequalify to shop with Affirm by visiting affirm.com or downloading the Affirm app.
If you don’t want to wait until after you shop to determine if you qualify to use Affirm, you can check if you prequalify either on the company’s website or app. During the prequalification process, you’ll need to provide personal information including your name, address, and Security Security number. If approved, Affirm will then disclose your spending limit and payment options.
If you shop with Affirm, it could impact your credit score.
If you have been approved to shop with Affirm, it might impact your credit. If your loan carries an interest charge and payments are spread out over 3, 6, or 12 months, Affirm might report your payment history to Experian.
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However, if your loan doesn't carry any interest and is divided into 4 biweekly payments or payments are made over 3 months with 0 percent interest, Affirm won’t report your loan to Experian.
Does Affirm report payments to the three major credit bureaus?
Usually, Affirm only reports loans to Experian. If you use Affirm and choose to make monthly installments with interest, making on-time payments can help your credit history. However, if you miss an installment, Affirm will report delinquent payments to Experian, which will have a negative impact on your credit score.
Affirm performs a soft credit inquiry when you create an account to prequalify you for future purchases. This soft inquiry does not affect your credit score and will not show on your credit report. However, when you do make a purchase, your credit score could be affected if Affirm does a hard credit inquiry.
Summary. Affirm reports the payment history of your first monthly installment loan to Experian. Succeeding monthly installment loans will go unreported unless you start making late payments. Applying for monthly installment loans can also affect your credit score negatively through hard credit inquiries.
If your application was declined you may still be eligible to use Affirm for a different purchase. Each loan application is considered separately, and checking your eligibility doesn't harm your credit score, so we hope you'll give us another chance in the future.
Affirm currently reports some loans and repayment activity to Experian and may report to other credit bureaus in the future. Typically, your first monthly installment loan with Affirm is reported. After you've had at least one loan furnished, Affirm won't report subsequent loans unless they become 30+ days overdue.
Affirm never charges late fees, but if you've stopped making payments for more than 120 days, we may charge off your loan. Once a loan has been charged off, it may be sent to a third-party collections agency at any time.
And the longer you take to pay off that loan, the more you'll pay in interest. Speaking of interest, if you return an item, you won't be refunded the interest you paid Affirm. Another reason to stay away from Affirm is because missed payments can be expensive.
Your credit scores aren't impacted if your purchase is split into 4 bi-weekly payments using Shop Pay Installments. If your purchase is split into monthly payments, then your payments may be reported to a credit bureau.
Affirm only has a 1.15 out of 5 stars with the Better Business Bureau (BBB), based on over 800 reviews. Trustpilot reviewers also gave it a poor rating of just 2.6 out of 5 stars, based on over 4,000 reviews.
Loan limits vary by merchant and will depend on your credit record and payment history with Affirm. The lender has no minimum credit score to qualify for a loan, and checking whether you prequalify will not damage your credit score.
Namely, there's no specific limit on the number of Affirm loans you can get, as it'll mostly depend on your credit score and payment history. This means that Affirm may decide to grant multiple loans at once for some customers and deny it to others.
Afterpay does not have any contact with credit report bureaus or reporting bodies. So, even if you have late payment fees, it won't affect your personal finances in any way. However, just like any personal loan, you should avoid making late loan repayments. The late fee may harm your spending power over time.
Affirm doesn't specify what credit score you'll need to qualify. Qualification is based on your overall credit history, your history with Affirm, and current economic conditions. Generally, the better your credit, the easier it will be to get approved for a point-of-sale installment loan.
If you would like to make a payment before your payment due date, you can absolutely do that. There are no penalties or fees for paying early. You may even save money on interest by choosing to pay off your loan early.
If your loan isn't finalized yet, we'll remove it from your Affirm account. It'll be like the loan never happened. If your loan is already finalized, you'll get a full refund. How long it takes for the refund to show up depends on the store.
If you want to cancel a loan without getting a fee, keep these steps in mind: Loans must be Voided in the authorization stage of the transaction so they won't be captured and registered as an official loan. At this point, you will be able to cancel the loan without any Affirm fee.
To its critics, though, Affirm, which recently raised $200 million in a growth round, is engaged in something sinister, luring people into a financial trap by enticing them to buy things they can't afford.
No, your credit score won't be affected when you create an Affirm account or check your eligibility. If you decide to buy with monthly payments through Affirm, your payments may be reported to credit bureaus. You can find more information in Affirm's Help Center.
Does Klarna run a credit check? According to its website, Klarna runs what's known as a soft check on your credit score for products like “Pay in 30 days”. This type of credit check cannot affect your credit score because the check is not reported.
Introduction: My name is Gregorio Kreiger, I am a tender, brainy, enthusiastic, combative, agreeable, gentle, gentle person who loves writing and wants to share my knowledge and understanding with you.
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