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Does Zip Money Affect Credit Score?

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Disclaimer: This calculator provides an estimate only and a comparison rate based on the example information provided. Other fees, costs and charges are not included. This calculation is not an offer for credit. The amount you can borrow may vary once you complete a loan application and all the details relevant to our lending criteria are captured and verified. The interest rate for this product is variable and subject to change. Any calculations made by you using this calculator is intended as a guide only.

3This comparison rate is based on an unsecured variable rate personal loan of $30,000 for a term of 5 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. $495 establishment fee and $10 monthly fee applies. Comparison as of:06/06/2022

Does Zip Money Affect Credit Score?

With buy now, pay later services now the most popular credit line of choice for consumers across Australia, it’s no wonder that their customers are beginning to ponder questions like ‘Does Zip Money affect credit score’, ‘Does ZipPay affect credit score’, and ‘Does Afterpay affect credit score’? 

If you’re looking to apply for a loan or credit card in the near future, it’s time to use the MoneyMe credit score finder and get your hands on a copy of your credit report to see just how your credit score is faring as a result of your buy now, pay later habit.

What are buy now pay later services?

Buy now, pay later (BNPL) services allow customers to purchase goods and services and pay for them at a later date via instalments, instead of paying the full purchase price upfront. 

The concept has been likened to a modern version of lay-buy, except BNPL customers can take the goods home or enjoy the service – such as a haircut or beauty treatment – immediately. 

The most popular BNPL services in Australia are ZipPay, Zip Money, and Afterpay. 

How do buy now pay later services work?

Each buy now, pay later provider operates slightly differently.

Afterpay divides the total cost of goods or services purchased into four equal fortnightly repayments and typically requires the first quarterly instalment to be paid on the date of purchase. Depending on how regularly you use the service, you may be rewarded with perks such as ‘nothing to pay today’ – or the deferment of the first instalment. 

Zip allows customers to set their own repayment frequency, from weekly to fortnightly to monthly. At a minimum, they require a monthly repayment and charge a monthly fee if the balance is not paid in full. It also permits customers to use the service to pay utility bills and subscriptions. 

One thing each service has in common is that they offer exclusive rewards, and they either don’t charge interest or offer extended interest-free periods – making them a popular choice over using credit cards for the same purchase.

What is Zip Money?

Zip Money is one of two consumer buy now, pay later services offered by Zip, an Australian-based company (they also offer a business service). 

While ZipPay offers customers buy now, pay later credit for purchases between $350 and $1,000, Zip Money is specifically targeted at larger purchases, with Zip Money max limits between $1,000 and $5,000 available to approved customers. 

Each purchase comes with a guaranteed three-month Zip Money interest-free period, with the monthly account fee waived if your Zip Money balance is $0 at the end of the month. With flexible repayment terms and low-to-no establishment fees, Zip Money has fast become one of the most popular choices for shoppers across the country. 

Does Zip Money do credit checks?

Yes. Both Zip Money and ZipPay conduct credit checks prior to Zip account approval. This is clearly outlined in both their terms and conditions and their privacy policy. 

To ensure your credit is in good health and won’t suffer from the ZipPay credit check required to assess your credit eligibility, get a free credit score check online today. 

Does Zip Money affect credit scores?

While Zip is legally permitted to share your credit information with credit bureaus, they won’t necessarily do so proactively. Or, in legal terms, they’ll use their discretion. 

If you miss your payments, they may report you to the relevant credit reporting body, thereby affecting your credit score. An important thing to note though: when you apply for a loan, as part of their procedure, banks may look at your transaction history. Your buy now, pay later transactions may not affect your credit report, but they may affect your loan approval.

Periodically ordering a free credit report to check your credit health is a great way to calculate credit score and tell if it’s being affected by your use of Zip Money or other buy now, pay later services. 

When using Zip Money, it’s important to remember that after the three-month interest-free period on each purchase has waned, any balance outstanding will be charged at the full Zip Money interest rate – a high 19.9% p.a. at the time of writing. If you’re not careful and can’t pay your outstanding balance in time, you could begin to accrue buy now, pay later debt quite quickly. 

Using the Zip Money repayment calculator can help you work out an affordable, regular repayment schedule to keep ahead of charges and avoid damaging your credit through missed payment or snowballing debt. 

How does credit score work?

Your credit score reflects the level of risk a lender is taking when they approve you for a line of credit. 

The healthier your credit – demonstrated through timely repayments and a diverse but small credit portfolio – the higher your credit score. The higher your credit score, the more likely you are to be 

approved when applying for new credit products such as personal loans, mortgages, and credit cards. 

People with a good credit score are also more likely to be offered higher credit limits and/or lower interest rates. 

Conversely, if your credit has suffered some blows and you’re sitting toward the lower end of the scale, you might be offered less credit than you’d hoped, given a much higher interest rate than expected, or have your application for credit declined. 

What affects your credit score?

There are a number of things that can negatively affect your credit score, including the following:

  • Defaults or missed payments on your personal loan, mortgage, or credit card repayments
  • Multiple applications for credit products within a short period, resulting in excessive hard credit checks by lenders
  • Late payments on utility bills or buy now, pay later services
  • High-frequency applications for balance transfers
  • Payday loans Court judgements or filing for bankruptcy

How to improve your credit score?

Thanks to changes in the way credit is reported, it’s now much easier to learn how to improve credit score – and put those lessons into action.

First, get your hands on an up-to-date credit report and take stock of your current financial situation. If there are upcoming bills you are unable to pay, it’s important to reach out to the credit provider to request a payment extension plan or negotiate a financial hardship agreement. It’s crucial that you do this before the due date of your payment. This is because while you are under such arrangements, your missed or late payments won’t be recorded on your credit history or impact your credit score. 

Next, reduce the lines of credit or credit limits you have available to you. Every open line of credit represents an additional risk to a lender, and closing these accounts demonstrates you are committed to managing and overcoming your debt. 

Once you’ve taken these steps, consider whether you are now capable of managing your repayments. If not, a debt consolidation loan might be a good way to minimise your monthly repayments and interest into a single sum.

Utilising the financial aids available to you is the smartest and quickest way to get back to making regular repayments on your credit. This is the number one way how to increase credit score. Thanks to comprehensive credit reporting, your positive credit behaviours now also influence your credit rating – so the sooner you can demonstrate a consistent pattern of repayments, the sooner your credit score will begin to improve. 

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Does Zip Money Affect Credit Score?

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simple pricing

Interest rate

6.95 %
to 22.95 %

Comparison rate*

8.34 %
to 24.33 %

Establishment fee
(Direct applications)

$395 for loans between $5,000 and $15,000

$495 for loans between $15,001 and $50,000

Monthly fee


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Minimum 3 years

Maximum 5 years

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*This comparison rate is based on an unsecured variable rate personal loan of $30,000 for a term of 5 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. $495 establishment fee and $10 monthly fee applies. Comparison as of: 06/06/2022

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