Buy now, pay later strategies, according to Martin Lewis, can harm your credit score.
Martin Lewis, a money saving expert, has issued a warning about ‘buy now, pay later’ schemes, claiming that they can harm your credit score.
Martin joined hosts Holly Willoughby and Phillip Schofield on This Morning to provide guidance.
Martin focused today on people’s credit scores, how they might enhance their scores, and what they should avoid.
One caller inquired about payment plans like Klarna and Clearpay, which allow customers to spread out payments for products over several months.
The caller was curious if using these companies for payments would have an impact on their credit score, as they had heard it may.
Martin has strong feelings about these methods, claiming that they encourage people to get into debt without realizing it.
Martin stated, ” “Buy now, pay later has surged in popularity over the last several years; it’s when you’re making an online buy and it asks whether you want to spread the cost out.
“I’m concerned about it and have a serious problem with it because it encourages individuals to fall into debt without realizing it.
“Your credit score will not be affected if you pay your bills in full each month and pay what you owe.
“In reality, it will be a problem since it would be nice if it were documented because it would increase your credit score by demonstrating that you were a responsible borrower.
“However, if you default, certain purchase now pay later organizations reserve the right to place a mark on your credit file, so it could have an influence on your credit file if you do not pay.”