Does Cash Now Pay Later affect your credit score?

To get Cash Now Pay Later, do you require a good credit score? When you repay your CNPL dues, does it affect your credit score. We have you covered on all the answers here.

The concept of “Cash Now Pay Later” (CNPL) isn’t new. Traditionally, stores hold on to an item until you can afford to pay for it, CNPL will help you walk out of the store with your item while utilizing a plan to pay for it over time.

In this article

CNPL is the way to go right now and the most convenient way to get what you need when you need it and to pay for emergencies. But if you’re wondering how Cash Now Pay Later impacts credit score, we’re here to explain how. We’ll get to that in a minute. Let’s get down to basics first.

What is Cash Now Pay Later?

As the name suggests, CNPL is a new form of layaway. You subscribe to Line, you become eligible to get a certain amount of money and then you use that money to take your purchase home. How do you pay back then? It totally depends on the payback arrangement you have with Line. When you initially subscribe you’ll be able to set up terms to pay off your purchase over a few weeks or months — without an interest FYI!

How does Cash Now Pay Later impact your credit score?

It doesn’t! That’s the good news. What sets Line apart is that we don’t do credit checks. A small background check on your banking transactions is done when you initially subscribe to the Line app. Nothing hardcore don’t worry, it’s a small inquiry that is carried out to see which CNPL plan will suit you best. 

A payment history check is done because it is a factor that determines what plan you qualify for. So, making on-time payments could help qualify for a better plan. But don’t worry if you’ve got a bad credit score, it doesn’t disqualify you from getting Cash Now Pay Later with Line. 

But once you sign up for CNPL with Line, we recommend a repayment plan that will work best for you. 

How can you avoid hurting your credit?

Yes, signing up for Line has nothing to do with your credit score when it comes to Cash Now Pay Later. But maintaining a credit score, in the long run, is good for you. A high score is what will help you qualify for a lower insurance premium and get approved for a home or apartment rental. You will also be able to save money on your security deposit if you have higher credit scores.

So, monitor your credit score and stay up-to-date with your credit status always. Make it a priority to pay your bill on time and in full every month. That way you won’t risk having missed a payment or have default status attached to your credit file.

Most importantly, pay off your balance as quickly as possible. It’s important to be a responsible borrower by making payments in full, on time. This will improve your credit no doubt.

The bottom line

Cash Noy Pay Later is worth considering if you’re on a cash crunch. You know you have the means to pay it off over the time given to you by Line. Don’t set yourself up by buying something you can’t afford to pay for, even over time.

Also, make all your payments on time so you qualify for better CNPL offers and the right type of financing when you need it. But ultimately CNPL or not, make it a priority to establish a solid credit history and maintain it well. 

This page is purely informational. Line does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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