Affirm Review | Will It Affect Your Credit Scores?

Affirm Review | Will It Affect Your Credit Scores?

Written by Bryan Daly
Fact-checked by Caitlin Wood
Last Updated November 23, 2022

Buy now, pay later (BNPL) services make large purchases more affordable by allowing a consumer to pay the balance that they owe at a later date, often using a series of prearranged installments. 

If you’re looking to make your next purchase affordable, consider Affirm; a Canadian fintech company that offers BNPL payment plans for both online and in-store purchases.

What BNPL Plans Does Affirm Offer? 

Affirm users have two options when it comes to paying back their BNPL loan, depending on the retailer you’re purchasing from, you may be offered both or one of these options. 

Pay In 4

Pay in 4 is the plan most Affirm members use when making smaller purchases of $1,000 or less. It lets you repay what you’ve borrowed in 4 interest-free installments. The first payment is due when you checkout and the remaining 3 will be debited from your bank account every two weeks (bi-weekly), over the following six-week period.    

The minimum purchase amount depends on the retailer but normally costs around $50. Additionally, Pay in 4 has no fees or interest and won’t affect your credit score (unless you miss a payment). If you’re worried about forgetting, you can set up automatic payments.      

Equal Monthly Payment Plan

Perfect for more expensive items, a monthly Affirm payment plan allows you to borrow a BNPL loan of $300 to $17,500. You can then repay what you’ve borrowed over a maximum term of 60 months. While the minimum purchase amount is about $300, retailers are once again responsible for imposing their own payment standards.  

This option does come with interest. Rates start at 0% but can go up to 36% APR, which is higher than most credit cards. The rate you qualify for may vary based (in part) on your credit profile, which will be checked when you apply. 

How Does Affirm Work?

You may see an option to apply for an Affirm BNPL loan during checkout when you shop with qualifying retailers. Once you pass the lending requirements, you should receive instant approval, after which you may choose to take out the loan or not.

To use Affirm, follow this 4-step process: 

Step 1

Shop online, in-app, or in-store with any Affirm partner. After you’ve selected your item, go through checkout and pick Affirm as your preferred payment option.   

Step 2

Enter the required details (name, email, etc.) and select a payment plan. Affirm will then explain what your loan conditions would be, including your:

  • APR
  • Total interest charges
  • Installments/payments 
  • Total loan amount 

Step 3

If you meet the appropriate criteria, Affirm will send you an instant confirmation notice. All you have to do is agree to it and finish your purchase.

Step 4

Affirm will send you texts and/or email reminders when it’s time to make your payments.

Will Using Affirm Affect Your Credit Scores?

Although Affirm will perform a soft credit check when you apply, it won’t affect your credit score, as no hard inquiries will appear on your credit report (which normally leads to a small decrease). 

Does Affirm Report To The Credit Bureaus?

Affirm does NOT report their clients’ loan activity to Equifax or TransUnion but the soft credit inquiry they perform when you create an account may appear on your credit history. However, this will not affect your credit.  

What Happens When You Make An Early Payment?

If you pay your BNPL loan early, Affirm won’t charge you any prepayment fees or penalties. Actually, paying your debt ahead of schedule can help you save on interest. 

Will Late Payments At Affirm Affect Your Credit Scores?

Affirm doesn’t charge any penalty fees if you make a late payment. However, failing to pay your BNPL loan on time may hurt your ability to qualify for a loan with Affirm in the future.  

Will Missed Payments At Affirm Affect Your Credit Scores?

While no late charges will apply, your purchase may be put in charge-off status if you miss your loan payments for more than 120 days. If affirm sells your debt to a collection agency, your credit score may also be negatively affected.  

Pros And Cons Of Affirm

Before you borrow a BNPL loan or make a purchase using Affirm, don’t forget to review the benefits and drawbacks of their company and payment platform:

Pros Of Affirm

  • Reasonable Costs – Affirm doesn’t charge service fees or penalties, Moreover, their Pay in 4 plans offers you 0% APR financing for your purchases.
  • Flexible Loan Conditions Fixed monthly or Pay in 4 (bi-weekly) payment plans are available and eligible borrowers can access loans of up to $17,500.
  • Reputability The acquisition of PayBright makes Affirm the largest BNPL firm for point-of-sale loans in Canada, with 7,500 domestic and international retailers. 
  • Soft Credit Check If you just want to apply or prequalify for a loan from Affirm, you won’t have to worry about damaging your credit score as they’ll only conduct a soft credit check.
  • Multiple Loans Possible If your financial and credit profile meets Affirm’s lending criteria, you may qualify for several BNPL loans from Affirm.  

Cons Of Affirm

  • Potential Down Payments – Depending on where you shop and which plan you have, some retailers will ask for a payment upfront (at the point of sale). 
  • Possible Credit Damage – Soft inquiries won’t affect your credit but missing and late payments may lower your score.

Which Stores Allow You to Use Affirm?

Affirm is accepted at more than 7,500 partner retailers, including:

  • Walmart
  • Urban Outfitters 
  • Dyson
  • Apple
  • Sephora
  • Oakley 
  • Expedia
  • Adidas
  • Best Buy
  • Nike 

What Happens If You Want To Return Something You Purchased? 

When using any online or in-store payment plan, there’s always a chance of making a mistake or being unsatisfied with your purchase. So, if you’re thinking about returning an item you’ve bought through Affirm, there are two options you can try:

Cancelling Your Order

If you’d like to cancel an order that hasn’t shipped yet, just contact the retailer you bought the product from and ask to cancel it. Keep in mind that this may only be possible if the store’s return policy allows it. Then, as long as your loan hasn’t been confirmed yet, Affirm will gladly remove it from your account, free of charge.    

Getting a Refund

If your loan is already finalized, don’t worry. Affirm may still be able to issue you a full refund (although this once again depends on the retailer). Stores that process orders quickly tend to return funds in roughly 21 days but there are rare cases where a refund can take up to 90 days, like when an order is cancelled or delayed. 

Otherwise, you can request a refund by contacting the store and, if their return policy permits it, the amount should appear on your loan balance in 3 – 45 business days. Log into your Affirm account to view your loan balance whenever you want.

Affirm FAQs

What credit score do I need to use Affirm?

For now, Affirm hasn’t listed a minimum credit score for their BNPL loans. A score of 660 – 900 usually means you have good-to-excellent credit, which will give you the best chances of approval for a favourable loan and interest rate. Unfortunately, if your score is within the bad range (300 – 600), you may have to apply with an alternative lender.     

Do I have to make a down payment to use Affirm?

If you’re not eligible for your full purchase, Affirm will ask you to make a down payment on it. The size of your down payment can vary according to the size of your purchase but once it and your loan are confirmed, both amounts will be processed immediately. Afterward, your payments should proceed as they were originally scheduled.   

What credit limit is offered by Affirm?

Affirm doesn’t currently state a maximum credit limit either. The spending limit you qualify for depends on your retailer’s policies. As it is with most lenders, Affirm uses its own algorithm to determine a specific applicant’s credit limit. Which is based on credit score and credit history and Affirm payment and account history.

What does Affirm look at when assessing eligibility?

While there is no limit to the amount of BNPL loans you can have at any given time, there are certain elements that can affect your ability to qualify for them, such as:
  • The length of your credit history
  • How responsibly you’ve paid debts in the past
  • How many other open credit accounts you have
  • How high both versions of credit score are (from Equifax and TransUnion)
Basically, your credit scores summarize your ability to make payments on time, so the worse they are, the harder it may be to qualify for a BNPL loan plan from Affirm.     

Are there any fees for late payments? 

No, Affirm doesn’t charge fees or penalties if you make a late payment on your loan. However, your credit score could be damaged by late and missed payments, which may affect your future creditworthiness with Affirm or any other lenders you apply with.    

Bryan is a graduate of Dawson College and Concordia University. He has been writing for Loans Canada for five years, covering all things related to personal finance, and aims to pursue the craft of professional writing for many years to come. In his spare time, he maintains a passion for editing, writing screenplays, staying fit, and travelling the world in search of the coolest sights our planet has to offer.

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