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What to know about Afterpay, Zip Pay, Zip Money and your credit score

Do interest-free payments affect your credit rating?


Interest-free payment providers such as Afterpay, Zip Pay & Zip Money have been invading the retail payments space. These new fintech companies offer you a way to purchase an item and pay it off in instalments, similar to a layby. However, in true fintech fashion, these products are not like traditional forms of credit.

This is what you need to know about how products like Afterpay can potentially affect your credit score. If you default on a payment, the default can be reported to the relevant Credit Reporting Body which lowers your credit score.

Payment providerDo they do a credit check?What do their terms and conditions say?



  • When you apply. “You authorise us to make, directly or through third parties, any enquiries we consider necessary to verify your identity and assess your capability to make payments according to the Payment Schedule in relation to all Afterpay Orders. This may include ordering a credit report, performing other repayment capability checks and verifying information you provide against third party databases.”*
  • If you don’t repay. “[…] you acknowledge that Afterpay reserves the right to report any negative activity on your Afterpay Account (including late payments, missed payments, defaults or chargebacks) to credit reporters (as that term is defined in the Credit Reporting Privacy Code) and collection agencies.”*
Zip PayYes.
  • When you apply. Given we are giving you access to finance, our system assesses a number of factors to work out your spending limit (primarily a Credit Check) so if you don’t meet our minimum requirements you may be declined. We do this as are committed to ensuring our Customers are in a position to make their repayments on time. “**
    Zip Money 



    • When you apply. “As a responsible provider of credit, we consider a number of factors as part of our assessment process. This includes, but is not limited to: Your credit file, which may demonstrate your repayment history with other lenders and accounts (e.g. telco, utilities and credit accounts). This helps us determine whether you can comfortably meet your repayments.”***

    *From Afterpay’s Terms of Service
    **From Zip Pay’s Help
    ***From Zip Money’s Help & FAQs

    Before you apply for any of the “new ways to pay“, make sure you consider whether you can afford the repayments and the effect it may have on your credit score.

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