Can Clearpay Impact UK User’s Credit Scores?

Clearpay at a glance

This service allows customers to break larger payments down into four more manageable sums that are required to be paid within two weeks. As all payments are interest-free, free of charge and taken out automatically from the user’s given bank account, it can be a smart way to budget when you want to spend a little without the worry.

Clearpay partners with over 3,500 high-street shops across the UK, like The Range, ASOS and JD Sports. Users will need to set up a Clearpay account and select this as a payment method at supporting stores. As this is a form of credit, it will have an impact on your credit score, so let’s take a look at how.

Clearpay and your credit score

As with any loan type, Clearpay can have either a positive or a negative effect on your credit. The advantages are that it will add another form of credit to diversify your loans and this can be worthwhile as long as you ensure to keep up with repayments. When you pay on time and effectively clear your balance, your credit report will show that you are sensible with your money and are more likely to be reliable when it comes to paying off other debts.

On the opposite side of the coin, the negatives will come if you default on payments, as this will show lenders that you aren’t likely to be reliable and you will lose points on your score each time you are unable to meet your payment deadlines. There is another negative to keep in mind, but this is in relation to your account and not your credit, and this is the fact that you will experience late fees and charges for missing payments. You will also lose access to your Clearpay account.

The good news is that Clearpay doesn’t run credit checks, so if you have bad credit and are hoping to build it in a simple way, this can be a worthwhile solution.