Does Affirm Go Against Your Credit?
Affirm's impact on your credit score varies depending on your actions, with some activities not affecting it at all, while others may.
Understanding Affirm's Influence on Your Credit Score
When considering Affirm for purchases, it's natural to wonder about its implications for your financial standing. The effect of Affirm on your credit score isn't a simple yes or no; it depends on how you interact with the service.
Actions That Won't Affect Your Credit Score
Certain initial steps with Affirm are designed to be credit-friendly and will not impact your score. These include:
- Creating an Affirm Account: Simply setting up an account with Affirm does not lead to any change in your credit score.
- Checking Prequalification: When you check to see if you prequalify for a loan, Affirm performs a soft credit check, which will not affect your credit score. This allows you to explore financing options without any immediate credit impact.
Actions That May Affect Your Credit Score
Once you proceed beyond the initial exploration phase, certain activities related to using Affirm for purchases can influence your credit score. These include:
- Making a Purchase with Affirm: When you decide to finalize a purchase using Affirm financing, this action may affect your credit score. This is typically when Affirm officially reports the loan to credit bureaus.
- Your Payment History with Affirm: This is one of the most significant factors. Consistently making your payments on time can positively contribute to your credit history, demonstrating responsible financial behavior. Conversely, missing payments or making late payments can negatively impact your credit score.
- How Much Credit You've Used (Credit Utilization): The amount of credit you utilize through Affirm relative to your total available credit can also play a role. Higher utilization rates might be seen as a higher risk by credit bureaus, potentially affecting your score.
- How Long You've Had Credit: The length of your credit history, including the duration of your Affirm loans, is a factor. A longer history of responsible credit usage is generally viewed favorably.
Summary of Affirm's Credit Impact
To summarize the various ways Affirm can interact with your credit, consider the following table:
| Action with Affirm | Potential Impact on Credit Score |
|---|---|
| Setting up an account | No impact |
| Checking if you prequalify | No impact |
| Making a purchase | May affect |
| Payment history (on-time/late) | Can positively or negatively affect |
| Amount of credit used | May affect (utilization ratio) |
| Length of credit history with Affirm | Can positively affect over time |
By understanding these distinctions, you can make informed decisions about using Affirm and manage its potential impact on your credit effectively.
