How Chase Pay Over Time May Impact Your Credit Score

While it may seem like taking out a new loan, Chase Pay Over Time doesn't directly impact your credit score. However, how you manage it can indirectly influence your credit health.

1. Increased Credit Utilization: When you move a purchase to a Pay Over Time plan, the amount still counts toward your total credit card balance. This can increase your credit utilization ratio, a key factor that can lower your score.

2. Monthly Payment Obligations: Your plan creates a fixed monthly payment. While this can make budgeting easier, it's another bill you must pay on time. Your overall minimum payment on the card will include this amount.

3. Risk of Missed Payments: Failing to make the minimum payment on your card, which includes the Pay Over Time installment, is reported to credit bureaus. A late payment can significantly damage your credit score.

4. Interest Accumulation: These plans charge interest. If you only pay the minimum, your balance can grow, keeping your credit utilization high for an extended period and potentially leading to more debt.

How Much Will Chase Pay Over Time Affect Your Credit Score?

Several factors determine how using Chase's Pay Over Time feature might influence your credit score. Here are the key aspects to keep in mind:

• Credit Utilization. This feature adds to your card's reported balance, which can increase your credit utilization ratio. A higher ratio can negatively impact your score, so it's wise to monitor your usage.
• Payment History. Your payments on a Pay Over Time plan are reported to credit bureaus. Consistently making on-time payments helps your score, while missed payments can cause significant damage.

How You Can Avoid Chase Pay Over Time Affecting Your Credit Score

Pay Your Balance in Full

The most direct method is to pay your plan's balance in full before the due date. This approach treats the purchase like a standard transaction, preventing interest accrual and ensuring your credit utilization ratio remains unaffected, thus protecting your credit score from any potential negative impact.

Make Timely Payments

Your payment history is a critical component of your credit score. Always make at least the minimum payment by the due date. Consistent, on-time payments prevent negative marks from being reported to credit bureaus and demonstrate responsible credit management, which positively influences your score over time.

Watch Your Credit Utilization

Be mindful of your credit utilization ratio—the amount of credit you're using compared to your total limit. A Pay Over Time plan increases your reported balance. To mitigate this, try to keep your overall debt low across all your credit cards, ideally below 30%.

Choose the Right Card to Chase Pay Over Time

Improving your credit score is always possible, and with consistent effort, most people can see meaningful changes within a few months. There are several proven methods you can use to boost your creditworthiness and maintain a healthy financial profile.

• Set up automatic bill payments. Since payment history is the most significant factor in your score, automating payments ensures you never miss a due date and build a positive track record.
• Reduce your credit utilization ratio. Aim to keep your credit usage below 30% of your total available credit by paying down balances or requesting a credit limit increase.
• Become an authorized user. You can get added to a family member's or friend's credit card that has a strong payment history and low utilization to benefit from their good credit habits.
• Diversify your credit mix. Lenders like to see that you can responsibly manage different types of credit, so having a mix of revolving credit and installment loans can help your score.
• Limit hard inquiries. Avoid applying for too much new credit at once, and when shopping for loans, do so within a short window to minimize the impact on your score.
• Monitor your credit reports. Regularly check your reports from all three major bureaus to identify and dispute any inaccuracies that could be dragging down your score.

The Bottom Line

Chase Pay Over Time does not directly affect your credit score. The primary impact on your credit comes from your overall card balance, credit utilization, and your history of on-time payments.

Frequently Asked Questions

Does using Chase Pay Over Time involve a hard credit inquiry?

No, activating or using the Chase Pay Over Time feature does not trigger a hard credit inquiry, so it won't directly lower your credit score.

How does a Pay Over Time plan affect my credit utilization?

The balance moved into a Pay Over Time plan still counts toward your total credit card balance, which can impact your overall credit utilization ratio.

Will missing a Pay Over Time payment hurt my credit score?

Yes, a missed payment is treated like any other late credit card payment and can be reported to credit bureaus, potentially damaging your credit score.