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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 provider||Do they do a credit check?||What do their terms and conditions say?|
|Zip Money|| |
*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.