How Rocket Money May Impact Your Credit Score

While Rocket Money's core features don't directly report to credit bureaus, certain actions you take through the app could indirectly influence your credit score. Here’s a look at the potential progression.

1. The process begins when Rocket Money helps you free up cash by identifying unused subscriptions and negotiating lower bills, improving your monthly cash flow.
2. With more disposable income, you're better equipped to make consistent, on-time payments for all your credit accounts—the most significant factor in your credit score.
3. You can then allocate the extra funds toward paying down existing debts, such as credit card balances, which directly tackles another key component of your credit profile.
4. Reducing your balances lowers your credit utilization ratio, the percentage of available credit you're using. Lenders view a lower ratio as a sign of responsible credit management.
5. Over several months, this combination of timely payments and lower utilization builds a stronger credit history, which can lead to a gradual increase in your credit score.

How Much Will Rocket Money Affect Your Credit Score?

The impact Rocket Money has on your credit score largely depends on which features you use. Here are a few key considerations to keep in mind when using the app.

• Bill Negotiation. This service won't directly affect your credit score. Rocket Money negotiates on your behalf, which doesn't involve a hard credit inquiry or changes to your credit report.
• Subscription Cancellation. Canceling subscriptions like streaming services or gym memberships through the app has no impact on your credit. These are not credit accounts and aren't reported to credit bureaus.
• Indirect Impact. While the app doesn't report to credit bureaus, its budgeting tools can help you manage money better. This could indirectly help your score by preventing late payments on actual credit accounts.

How You Can Avoid Rocket Money Affecting Your Credit Score

Opt-Out of Credit Reporting Features

To prevent any impact on your credit, you can choose not to enroll in Rocket Money's specific credit-building services. This allows you to use the app solely for budgeting and managing subscriptions, ensuring no financial activity is reported to the major credit bureaus on your behalf.

Ensure Timely Bill Payments

If you use Rocket Money for bill negotiation that results in a new payment plan, always pay on time. Late or missed payments are the primary actions that can negatively affect your credit score, regardless of the platform used to manage the bill itself.

Ways to Improve Your Credit Score

Improving your credit score is entirely possible and achievable through consistent, positive financial habits. While it takes time, most people can see meaningful changes within a few months by following proven methods to build their creditworthiness.

• Monitor your credit reports. You can get free reports from all three major bureaus to check for inaccuracies, dispute errors, and track your progress.
• Set up automatic payments. Payment history is a huge factor in your score, so automating your payments ensures you never miss a due date.
• Lower your credit utilization. Aim to keep your credit utilization ratio below 30% by paying down balances or requesting a credit limit increase on existing cards.
• Become an authorized user. Being added to a credit card account that has a long, positive history can give your score a helpful boost.
• 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. Space out your applications for new credit and use prequalification tools whenever possible to avoid a temporary dip in your score.

The Bottom Line

Using Rocket Money for budgeting and canceling subscriptions won't affect your credit score. However, services that involve credit inquiries, such as bill negotiation, could potentially have an impact.

Frequently Asked Questions

Does signing up for Rocket Money hurt my credit score?

No, creating a Rocket Money account and using its budgeting tools does not impact your credit score as it only performs a soft inquiry.

Can Rocket Money's bill negotiation service lower my credit score?

No, the bill negotiation feature does not affect your credit. Negotiating bills for services like cable or internet does not require a hard credit check.

Will canceling subscriptions through Rocket Money impact my credit?

Typically, no. Canceling standard subscriptions like streaming services won't affect your credit. Only canceling a credit-related account could have an indirect impact on your score.