Does Affirm build credit (No, it may impact negatively)

Affirm might not help you to build credit score as it does not report your activity to credit bureaus. However, it may report your loans with delinquent payments, which can negatively impact your credit score.

Confused? Read more to learn how Affirm impacts your credit score.

Affirm is a buy now pay later app or service that offers you no-interest pay-over-time plans to purchase items from thousands of online and offline retailers.

These no interest pay over time plans are known as Point-of-sale (POS) loans. It is an easy way to access credit and split the payment of your purchase into several weekly or monthly installments.

POS loans are getting popular thanks to Affirm and other BNPL apps such as AfterpayKlarnaSezzle, and many more.

If you are thinking of building credit score with these apps or POS loans, you might be heading in the wrong direction.

The impact of BNPL apps on credit score is a little ambivalent.

Let’s discuss this in detail below.



Does Affirm build credit

No, Affirm does not help you build credit as it did not report a loan to Experian if the loan is 0% and 4 biweekly payments, or you were only offered one option at the application of a three-month payment term with 0%.

However, it may negatively impact your credit score as it may report to the Experian if you fail to pay on time. 

Affirm does not report your good payment behavior to the credit bureaus, but it may report loans with delinquent payments, so it will not be going to help you build credit score.

If your primary goal is to build credit score, Affirm is not the right option. You should instead look for credit builder cards.

As per Affirm, below are some things that do not impact credit score and things that might affect it:

How might using Affirm affect my credit score?

These things won’t affect your credit score:
  • Creating an Affirm account
  • Seeing if you prequalify
These things may affect your credit score:
  • Your payment history with Affirm
  • How much credit you’ve used
  • How long you’ve had credit
  • Making late payments

So, by using Affirm to finance your purchase, either credit score will have no effect or it may get negatively impacted. But, yes it won’t help you to build the credit score.

To read more how Affirm reports your payment and loan activity to credit bureaus, you may read the Affirm official statements.

As per Affirm terms of use :

You also agree that if you fail to pay an amount owed to Affirm pursuant to this Agreement or any other agreement you have with us or any Bank Partner, Affirm may engage in collection efforts to recover such amounts from you. These collection efforts may involve contacting you directly, submitting your information to a collections agency, or taking legal action. FAILURE TO PAY MAY AFFECT YOUR CREDIT SCORE.

When will my payment history appear on my credit report?

It may take up to 60 days for your loan payments to appear on your credit report.

As per Affirm:

If your loan includes furnishing, payments may take 30-60 days to appear on your credit report, depending on the date your payment was made and the date it was reported to Experian.

Final Words

Affirm might seem a perfect way to purchase an item you can’t afford to pay in full or charge it to your credit card. However, don’t consider it to build your credit score.

As discussed above, Affirm doesn’t help you build a credit score as it doesn’t report your good behavior to the credit bureaus.

On the other hand, if you fail to pay the payment to Affirm, it may report it to Experian, which means Affirm can actually have a negative impact on your credit score.

So, if your goal is to build the credit score, Affirm or other BNPL apps are not the right option. Instead, you should look for credit builder cards.

That’s it for now. To read more, have a glimpse at our Affirm section or follow a few related posts below.

Further Reading:

Why did my Affirm limit decrease (5 Reasons)

Can you pay Affirm with a Credit Card (Step Guide)

Can you use Affirm to pay bills

Can you use Affirm virtual card on Cash App, Venmo, PayPal, Google Pay, Apple Pay

Does Best Buy accept Affirm in 2022? How to use it?