Affirm, a popular Buy Now, Pay Later (BNPL) company, offers customers the flexibility to purchase items and pay for them over time.
While there is no minimum credit score requirement for Affirm loans, having a credit score of 640 or higher can increase your chances of approval. But what factors contribute to determining your credit score, and how can you improve it to maximize your odds of being approved for Affirm?
A Closer Look at Affirm’s Offerings
Affirm provides loans tailored to a variety of needs, with amounts ranging from $50 up to $25,000. It’s worth noting that for those larger amounts, a down payment might be necessary to secure the loan. While Affirm doesn’t publicly announce a set minimum credit score, 550 seems to be a common threshold for approval.
One of Affirm’s attractive features is its interest plans. Their Pay-in-Four option offers interest-free payments, making it a popular choice for many. However, if you’re leaning towards spreading out payments over a more extended period, their monthly plans come with a 30% APR. If you’re wary of credit checks affecting your score, rest easy. Affirm conducts a soft inquiry, which means your credit score stays unaffected.
In terms of repayments, you have a couple of straightforward choices. You can either break down your loan into four payments spread across two months or opt for a monthly plan. And while life can be unpredictable, if you do find yourself missing a payment, Affirm’s approach is to pause your account. A big plus is that you won’t find yourself entangled in any hidden charges or sneaky fees.
For the shoppers among us, whether you’re clicking through an online store or strolling through a mall, Affirm is there to facilitate your purchase. But a couple of things to remember: Affirm currently doesn’t support payment rescheduling, and there’s no feature to voluntarily pause your account.
Factors Affecting Affirm Credit Approval
Securing financing through Affirm is a process influenced by various financial and personal factors. To better understand your likelihood of approval, it’s essential to understand the primary criteria that Affirm looks at during their evaluation.
The Role of Credit History and Utilization
When evaluating your creditworthiness, Affirm and other lenders consider your credit history, which includes your payment history, credit utilization rate, and length of credit history.
Having good credit signals to lenders that you are a responsible borrower who can manage credit effectively. Maintaining a low credit utilization rate (the percentage of your total available credit that you’re using) also helps demonstrate your ability to manage your debts responsibly.
Steady Income and Financial Stability
Lenders also consider your income and financial stability when determining whether to approve you for credit. A stable job and a steady income indicate that you are more likely to meet your financial obligations and make timely payments on your debts. Ensure that you have a reliable source of income before applying for credit, as this can make a difference in your approval odds.
Tips for Boosting Your Credit Score for Affirm Approval
1. Review Your Credit Reports
Before applying for an Affirm loan or any other credit product, it’s crucial to know your credit scores and understand what’s on your credit reports. You can request a free copy of your credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) once every 12 months at AnnualCreditReport.com. Review your reports carefully for errors or discrepancies that could be negatively impacting your credit score.
2. Pay Your Bills on Time
Your payment history makes up a significant portion of your credit score. To improve your credit and increase your chances of being approved for an Affirm account, make sure to pay all your bills on time. Setting up automatic payments or using calendar reminders can help you stay on track with your payments.
3. Reduce Your Debt
Lowering your overall debt, especially revolving credit card balances, can help improve your credit utilization rate and boost your credit score. Focus on paying down high-interest debt first, and avoid charging more on your credit cards than you can pay off each month.
4. Avoid Applying for New Credit Frequently
Each time you apply for new credit, it generates a hard inquiry on your credit report, which can temporarily lower your credit score. Multiple hard inquiries in a short period may also signal to lenders that you are a high-risk borrower.
To improve your chances of being approved for Affirm’s Buy Now Pay Later service, limit your applications for new credit and only apply when necessary.
5. Get Professional Help
If you’re struggling with bad credit and need help improving your credit score, consider seeking professional assistance from a reputable credit repair company like Credit Saint. They help clients dispute and potentially remove inaccurate negative items from their credit reports, such as late payments, collections, charge-offs, foreclosures, repossessions, and bankruptcies.
Visit their website for a free credit consultation to learn more about how they can help you improve your credit and increase your likelihood of being approved for new credit.
While there is no minimum credit score requirement for Affirm, a credit score of 640 or higher can increase your approval odds. By improving your credit, maintaining a low credit utilization rate, and demonstrating steady income, you will also qualify for better interest rates when applying for other credit in the future.