How Cherry May Impact Your Credit Score

Wondering if using Cherry for your next purchase will affect your credit? While the initial application may not, how you manage your loan payments afterward can certainly influence your credit score.

1. Initial Application: Applying for Cherry financing typically involves a soft credit inquiry to check eligibility. This type of check does not impact your credit score, allowing you to see your options without risk.
2. Loan Acceptance: Once you accept a loan, it may be reported to credit bureaus as a new account. Opening a new line of credit can slightly lower the average age of your credit history, causing a temporary, minor dip in your score.
3. Payment History: Consistently making on-time payments is crucial. This positive payment history can be reported to the credit bureaus, which may help build or improve your credit profile over the life of the loan.
4. Late or Missed Payments: This is where the most significant impact occurs. If you miss payments or are consistently late, Cherry may report this delinquency, which can negatively affect your payment history and lower your credit score.
5. Loan Completion: Paying off your loan successfully closes the account in good standing. This adds another positive, paid-as-agreed account to your credit report, which is beneficial for your long-term credit health.

How Much Will Cherry Affect Your Credit Score?

The impact of using a Cherry payment plan on your credit score depends on several factors, from the application process to your repayment behavior. Here are the key aspects to keep in mind.

• Soft vs. Hard Inquiry. Checking your eligibility for Cherry results in a soft credit pull, which does not affect your score. Cherry uses only soft credit inquiries throughout the entire process, including when finalizing the loan. This means no hard inquiries and no temporary dip in your credit score.
• Payment History. Cherry reports your payment activity to the major credit bureaus. Consistent, on-time payments can help build a positive credit history, whereas late or missed payments will have a negative impact.

How You Can Avoid Cherry Affecting Your Credit Score

Understand the Application Process

Cherry always uses soft credit inquiries throughout the entire process, including the final application, which means your credit score will not be impacted at any stage. You can complete the application with confidence knowing there's no credit score risk.

Maintain On-Time Payments

Once your payment plan is active, it's treated like any other loan. Making timely payments is crucial, as late or missed payments can be reported to credit bureaus. This negative reporting will directly harm your credit score, so consistency is key to protection.

Ways to Improve Your Credit Score

Improving your credit score is not only possible but achievable through consistent, positive financial behavior. There are several proven methods to boost your creditworthiness, and most people can see meaningful changes within three to six months.

• Monitor your credit reports. You can obtain free reports from AnnualCreditReport.com to check for inaccuracies, detect potential identity theft, and track your progress over time.
• Establish automatic bill payments. Since payment history is the most significant factor in your score, setting up automatic payments ensures you never miss a due date.
• Reduce your credit utilization ratio. Aim to keep your credit utilization below 30% by paying down balances or requesting a credit limit increase.
• Become an authorized user. Being added to a credit card account with a long history of on-time payments and low utilization can give your score a boost.
• Diversify your credit mix. Lenders like to see that you can responsibly manage different types of credit, such as revolving credit (credit cards) and installment loans (auto or personal loans).
• Limit hard inquiries. Applying for too much new credit at once can temporarily lower your score, so use prequalification tools and space out your applications.

The Bottom Line

Cherry uses only soft credit checks for applications and throughout the loan process, so accepting a Cherry loan will not negatively impact your credit score. Your payment history is reported to credit bureaus, which can help build your credit when you make on-time payments.

Frequently Asked Questions

Will applying for Cherry affect my credit score?

Applying for Cherry only requires a soft credit check, which does not impact your credit score. This allows you to view your financing options risk-free.

Does using a Cherry payment plan build my credit history?

Cherry reports all payment history to the major credit bureaus. Therefore, on-time payments will directly help build and improve your credit score.

What happens to my credit if I miss a Cherry payment?

While on-time payments ARE reported and help build your credit, late or missed payments may also be reported to credit bureaus, which could negatively affect your credit score and result in fees.