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Does Clearpay Affect Your Credit Score?
July 1, 2025
Quick Answers
Using Clearpay for purchases will not affect your credit score as the platform does not conduct hard credit inquiries for approval.
Missed payments can negatively impact your credit file if Clearpay refers your outstanding balance to a debt collection agency.
Conversely, making timely payments does not build your credit history, as this activity is not typically reported to credit reference agencies.
What Clearpay Is
Clearpay is a “buy now, pay later” service that allows shoppers to purchase items immediately and pay for them over time. The platform splits the total cost of a purchase into four equal, interest-free installments. These payments are automatically deducted from the user's designated card every two weeks until the balance is paid in full.
Using Clearpay does not impact a user's credit score upon signup, as the service does not perform a hard credit check for approval. While on-time payments are not typically reported to the major credit bureaus, late payments can be. This means that if a user misses payments and the account is sent to a debt collection agency, it could negatively affect their credit score.
How Clearpay Could Impact Your Credit Score
While using Clearpay won't automatically harm your credit score, certain actions can. Here’s a look at the progression of events that could lead to your payment habits influencing your credit file.
Initial Use and Soft Checks: When you sign up and make purchases, Clearpay typically runs a soft credit check. This initial review is not visible to other lenders and does not affect your credit score.
A Missed Payment and Late Fees: If you miss an installment, the first consequence is usually a late fee from Clearpay. At this point, the issue remains between you and the platform and is not yet reported externally.
Escalation to Default: Should payments remain overdue for an extended period, Clearpay may classify your account as being in default. This is the critical stage where the situation can escalate beyond internal penalties.
Reporting to Credit Agencies: Once an account is in default, Clearpay reserves the right to report the delinquent account to major credit reference agencies (CRAs). This action makes your payment history visible to other financial institutions.
Impact on Your Credit Report: A reported default or a history of late payments becomes a negative mark on your official credit report. This can lower your credit score, potentially making it harder to secure future credit.
How Much Will Clearpay Affect Your Credit Score?
While using Clearpay doesn't automatically impact your credit score, certain actions can influence it. Here are a few key factors to consider when using the buy now, pay later service.
- Late Payments: Missing a payment can lead to late fees and may be reported to credit reference agencies. This negative mark can lower your credit score and stay on your report for years.
- Hard Credit Checks: Clearpay typically uses soft checks, which don't affect your score. However, some circumstances could require a hard inquiry, which may cause a small, temporary dip in your credit score.
- Overall Debt: Using Clearpay adds to your total outstanding debt. Lenders consider your debt-to-income ratio, so a higher balance could impact your ability to secure future credit.
How You Can Avoid Clearpay Affecting Your Credit Score
Ensure Timely Payments
The most crucial step is to make all your Clearpay payments on time. Late payments can be reported to credit reference agencies, potentially lowering your score. Setting up automatic payments or reminders can help you stay on track and avoid any negative marks on your credit file.
Use Clearpay Responsibly
Treat Clearpay like any other form of credit. Only use it for purchases you can comfortably afford to repay within the agreed-upon schedule. Overextending your budget with multiple buy now, pay later plans can lead to missed payments and negatively impact your financial health.
Ways to Improve Your Credit Score
No matter where your credit score currently stands, it's always possible to make positive changes. With consistent, positive financial habits, you can improve your credit score and unlock better financial opportunities.
- Monitor your credit reports. Regularly check your reports from Experian, TransUnion, and Equifax for inaccuracies or signs of fraud, and dispute any errors you find.
- Set up automatic payments. Your payment history is the most significant factor in your score, so ensure all your bills are paid on time by automating them.
- Reduce your credit utilization. Aim to use less than 30% of your available credit, as this is the second most important factor in your score calculation.
- Become an authorized user. Being added to an account with a long history of on-time payments and low utilization can help build your own credit profile.
- Diversify your credit mix. Lenders like to see that you can responsibly manage different types of credit, such as credit cards and installment loans.
- Limit hard inquiries. Avoid applying for too much new credit in a short time, as multiple hard inquiries can temporarily lower your score.
The Bottom Line
Clearpay typically doesn't affect your credit score with on-time payments. However, late payments may be reported to credit reference agencies, which could negatively impact your score over time.
Frequently Asked Questions
Does Clearpay perform a credit check?
No, Clearpay does not conduct a hard credit check when you sign up. This means creating an account will not affect your credit score.
What happens if I miss a Clearpay payment?
Missing a payment incurs late fees and your account will be paused. Unpaid debts could eventually be passed to a collection agency, which may impact your credit.
Can using Clearpay improve my credit score?
No, using Clearpay does not currently improve your credit score. On-time payments are not reported to the main UK credit reference agencies like Experian or Equifax.
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