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Does finance affect my credit score?
Whether finance affects your credit score depends on the type of agreement and how it is reported. Here is the plain-English version.
Soft search vs hard search
A soft search checks your eligibility without leaving a footprint that other lenders can see. A hard search is the formal credit application and is visible to other lenders for around 12 months. Eligibility checks on most finance options start with a soft search.
How each option reports
- PayPal Pay in 3 — A soft credit check at signup. PayPal does not currently report ongoing repayments to UK credit bureaus, though this can change. Check PayPal's latest policy if it matters to you.
- Pay It Monthly (0% APR finance) — A hard credit search at the point you submit the formal application. The agreement appears on your credit file once approved. Paying on time builds positive history; missed payments do the opposite.
What missed payments do
A missed instalment is reported and stays on your credit file for around six years. If you are worried about a payment, contact the finance provider before the due date — most can offer a short grace or rearrangement, which is always better than a missed marker on your file.
Where to verify the latest details
Finance provider terms change. Before applying, read the provider's own credit summary on their site — they are required to publish the exact reporting behaviour, and that is the most authoritative source.
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