Putting it on a real credit card generally lowers your borrowing cost to below zero. You either get non-cash benefits like frequent flyer miles (or hotel chain points) or cash back which can be as much as around 2%.
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Apple Pay Later Loans Will Soon Appear on Experian Credit Reports
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There’s a huge difference between not having a credit history and having “bad credit”.
No one should ever feel obligated to take a short term loan just to “build credit”. Just use a credit card and pay it off each month. That plus information on your current financial situation should be more than enough to obtain any kind of loan down the road that’s actually worth carrying.
No bank issuing a loan actually cares about your credit score. What they care about is responsible credit use and your credit history. Short term loans don’t necessarily count in your favor, especially if you’re taking more than one or two in any given year.
New credit file is a new account. Ding on your credit history. Ding on your score. Then when you pay it off it’s a ding on your score for closing a good standing account. Now multiply that by multiple purchases.
Keep digging yourselves into debt, peasantry! Go go go! But at least your purchases get many "likes" and "subs" amirite?
Why do people think paying your credit card off monthly is bad for your credit? I’ve never done anything otherwise and have a credit score in the 800’s…
I have never understood this either. Of course the whole credit system is screwball. A company I do business with (mortgage servicer and not a choice I can make) was hacked. I get the standard letter all is well, may not have lost your info, still assessing and here free credit reporting to help you. What you get is a ton of emails...balance high, balance low, credit rating up, credit rating down, ratio is up, ratio is down, need a loan, need to refinance, etc. I have never missed a payment, been charged a late, or been charged interest on a credit card, but my score goes up and down with the balances that are all paid off every single month. There should be no movements for month to month balances if paid in full every time. The whole thing is a scam and the biggest is the credit score you see is not even the one lenders use. My has swung 50 points up and down in the last year. That can kill you on insurance policy renewals depending on when they query.
The fact you think BNPL is a a way to “build credit” tells me all I need to know. It’s predatory. It’s everywhere suddenly. And there’s a reason for that
Have an 815 score. No guidelines have been set yet so to think you know lol. Nobody does not yet.
May I ask where you heard this? Because from what I've learned banks look at your credit score right off the bat and if it's not above a their threshold they won't investigate further.
Most consumer credit products nowadays are like that, especially anything that has automatic approval. But even those will sometimes have a phone number for reconsideration where the rep can override the automatic decision.
Lots of bigger credit products like personal loans, lines of credit or mortgages might do initial screening based on custom credit scores but will do full underwriting based on your individual characteristics.
42 percent have made late payments. That’s now how ya build credit bud. And most of those are probably late on other more important payments. But congrats on your credit score (not sure why that’s relevant).
42% of Buy Now, Pay Later Users Have Made a Late Payment
More than 4 in 10 who’ve taken out a buy now, pay later loan have made a late payment on one of those loans, according to our survey.
Your average person has a very low aptitude on basic finances. There’s a reason it’s not a basic course in high school or college. The financial system wants ignorant buyers. And they loathe people who pay off their cards in full every month
When it comes to fico scores specifically, there are a number of reasons including but not limited to:
- You will take a penalty for having a trade line < 12 months old
- It will lower your average age of account, potentially significantly if you use these services often
- A very short term issue, but high utilization will have a negative impact as anything above ~70% has the highest negative impact and above 30% is still considered high. For utilization sensitive creditors this could cause adverse impact on other credit accounts if they get spooked if you suddenly have a new account with 75-100% utilization
- Could be construed as credit seeking if you have a number of new accounts in a short period of time impacting your ability to get meaningful new trade lines
- Depending on how the trade line reports (we don't know yet) it could hurt in the newest fico models (10/10T) as they penalize personal loans now. A similar service (Affirm) reported trade lines as personal loans before they stopped reporting most trade lines all together so its not out of line to think these may report similarly.
This is a misinformed/misleading comment. I have leveraged my good credit to end up paying less in the long run, and making better use of my money in the short term (high interest on savings for an extra few months while I pay back a large purchase at no interest, for example)