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2022 post-payment review

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How Afterpay works

Afterpay is a Buy Now, Pay Later (BNPL) lender that allows you to spread the cost of an item over a series of installment payments. You’ll make the first of four payments when you purchase the item, then pay off the rest in six weeks. Your payments will be due every two weeks.

You will choose Afterpay as your payment method when checking out at your preferred retailer. You can use Afterpay in the app, on a retailer’s website, and for in-person purchases. There are thousands of retailers that allow you to use Afterpay at checkout. Some popular companies include Adidas, Lululemon, Ulta Beauty, and Levi’s.

There is no cost to use Afterpay – as long as you make payments on time. If you don’t pay more than 10 days after the due date, you’ll be charged a late fee of up to $8. You can pay more late fees if you continue to make late payments, but the total amount of late fees you can pay on a specific purchase is capped at 25% of the order value.

Above all, Afterpay does not approve 100% of orders and takes several factors into account before giving the green light to your purchase. For example, the longer you have been using Afterpay, the more likely you are to have a purchase approved. The amount you need to repay and the number of orders you currently have open with the company are also factored into the loan decision.

Afterpay may perform a soft credit check when you register with the platform. A soft credit check allows a lender to see your credit history without have an impact on your credit score. Some lenders use a firm credit check, which impacts your credit score. Buy now, pay later payments won’t affect your credit score either, as Afterpay doesn’t report them to any credit bureaus.

To use Afterpay, you must be a resident of a US state or Washington, DC. You must also be at least 18 years old (or 19 in Alabama) and provide some contact information.

Advantages and disadvantages of Afterpay

Who is Afterpay for?

Afterpay is ideal for customers who want to spread the cost of their purchase over multiple paychecks. You will make Afterpay payments every two weeks, which syncs well with a bi-weekly pay period. Unlike most other lenders, the company also does not charge interest, a major plus for many borrowers.

Be careful. Buy now, pay later programs can trick you into buying something you can’t realistically afford. Just because the bi-weekly payments seem small doesn’t mean the total cost isn’t significant yet. Make sure you have budgeted for the item before making your purchase.

How Afterpay compares to other Buy Now, Pay Later apps

Among Afterpay, Affirm and Klarna, only Affirm does not charge late fees. Late fees can add to the total cost of your loan, so budget appropriately to ensure you don’t fall behind.

All three companies offer a “pay in four” option, which means you pay for your item in four installments. Plus, each business has a list of thousands of businesses they’ve partnered with, making it possible to buy now, pay later for many different types of purchases.

How reliable is Afterpay?

Afterpay is rated B by the Better Business Bureau, a non-profit organization focused on consumer protection and trust. The BBB lists hundreds of complaints filed against the company as the reason for its rating. The BBB determined ratings based on a company’s response to customer complaints, honesty in advertising, and transparency in business practices.

Keep in mind that BBB ratings don’t always guarantee you’ll have a good relationship with the lender. Talk to friends and family who have used the company to get a fuller picture of Afterpay.

Afterpay has not been involved in any recent controversies.

Frequently Asked Questions

Does Afterpay affect your credit score?

No, Afterpay does not affect your credit score because the company does not report your payment history to any credit bureau.

Can I refund my Afterpay purchase sooner?

Yes, you can refund your purchase now, pay later, plan ahead. The company will not charge you any fees for this.

How do I get approved for Afterpay?

To get started, you’ll create an account with the company and receive an instant approval decision. Afterpay considers a number of factors to decide if you qualify, including your credit history.