Affirm app on a smartphone
Source: Affirm (Facebook)

Does Affirm Impact Your Credit Score or Show Up on Your Credit Report?

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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.

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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.

Does Affirm affect your credit score?
Source: Affirm (Twitter)

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.

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How does Affirm work?

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.

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.

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Source: Twitter

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.

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