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What to know about Afterpay, zipPay, zipMoney and your credit score

Do interest-free payments affect your credit rating?

Interest-free payment providers such as Afterpay, Openpay and zipMoney have been invading the retail payments space. These new fintech companies offer you a way to purchase an item and pay it off in instalments, similar to a layby. However, in true fintech fashion, these products are not like traditional forms of credit.

This is what you need to know about how Afterpay will affect your credit score.

Payment provider Does it affect your credit? What do their terms and conditions say?
Afterpay

No.

Afterpay reserve the right to check your credit but generally do not.

  • When you apply. "You authorise us to make, directly or through third parties, any enquiries we consider necessary to verify your identity and assess your capability to make payments according to the Payment Schedule in relation to all Afterpay Orders. This may include ordering a credit report, performing other repayment capability checks and verifying information you provide against third party databases."*
  • If you don't repay. "Afterpay reserves the right to report any negative activity on your Afterpay Account (including late payments, missed payments, defaults or chargebacks) to credit reporting agencies."*
Openpay

Yes.

Openpay may check your credit report.

  • When you apply. "We may obtain a credit report about you in connection with your Openpay or Open Plus Plan and you consent to us doing this. A credit reporting body (CRB) may include information about you in credit reports to credit providers (such as us) to assist them to assess your creditworthiness."**
  • If you don't repay. "If you fail to meet your payment obligations or if you commit a serious credit infringement, we may be entitled to disclose this to a CRB (Veda)."**
Certegy Ezi-Pay

No.

Certegy doesn't send your account information to a credit reporting body.

  • If you default. "Although the Privacy Act permits us to disclose your credit information to CRBs for certain purposes, and to receive information from them, we no longer do this. However, we will appoint an agent to ensure that any previously listed defaults will be updated with the CRB as required (eg, when repayments are received). CRBs may include the information provided to them in their reports to other credit providers in order for them to conduct an assessment of your creditworthiness."***
zipMoney

Yes.

zipMoney will check your credit when you apply.

  • When you apply. zipMoney will check your credit report when you apply.~
  • If you default. If you default on your repayments, zipMoney will report this to the relevant Credit Reporting Body.~
zipPay

Yes.

zipPay will check your credit when you apply.

  • When you apply. "When creating an account, we may perform identity and/or credit checks to verify the customer and their ability to manage payments."****
  • If you default. Payment defaults will be reported a relevant Credit Reporting Body.~
Lombard Finance (including CreditLine and Once)

Yes.

Lombard Finance will check your credit when you apply.

  • When you apply. "We may obtain credit reporting information about you from credit reporting bodies."*****
  • If you are late with payments or you default. "We may also disclose your credit information relating to your dealings with us to credit reporting bodies."*****

*From Afterpay's Terms of Service
**From Openpay's Terms of Service
***From Certegy's Terms of Use
~Confirmed with zipMoney and zipPay's customer service team
****From zipPay's Terms of Use
*****From Lombard Finance's Privacy Policy


Before you apply for any of the "new ways to pay", make sure you consider whether you can afford the repayments and the effect it may have on your credit score.

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Picture: Shutterstock
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