If you clicked on this article, you must be wondering, does Sezzle build credit? Keep reading to find out!
When you use a buy now, pay later service like Sezzle, it raises all kinds of questions about its pros and cons. You worry if there are hidden charges or if owing debts to digital platforms negatively affects your credit score. Mostly, you wonder, does Sezzle build credit? When you are buying things on credit, might as well make the best use of it.
Can Sezzle Build Your Credit Score?
Yes, Sezzle builds your credit score. The regular version of Sezzle doesn’t have any effect on your credit score. However, Sezzle Up, which is an upgraded tier, can have a negative and positive effect on your credit score. It mostly depends on whether you make on-time payments.
How Does Sezzle Build Credit?
The answer to does Sezzle build credit is a ‘Yes.’ When you become a Sezzle Up member, you give Sezzle unwitting permission to report your payment history to the credit bureaus. The three major credit bureaus they report to are TransUnion, Experian, and Equifax.
So, you have to be smart about how you use Sezzle to build credit. The model of the service is that you make your payments to any of the selected Sezzle integrated stores for a product in four installments. The first payment is done at the time you hit checkout, paying 25% of the total amount usually.
Sezzle expects you to pay the rest of the amount over the course of six weeks, making every installment two weeks apart. When you make these payments to Sezzle on time, Sezzle reports your squeaky clean payment activities to the credit bureau, thus building your credit score.
Sezzle reviews your previous month’s payment history at the end of next month. They take snapshots of the payment activities on your account at month-end and report those to the bureaus.
If you miss a payment within 30 days but pay it back by the time the monthly review is done, Sezzle won’t report it to the bureau. So, in a way, Sezzle not only builds your credit, they help you from getting a negative credit score as much as possible.
Overall, the bureaus review your on-time payments from Sezzle and use those as proof that you are capable of repaying your debts on time. They tend to add points to your credit score for this reason.
How to Not Get Negative Scores With Sezzle?
So, the answer to does Sezzle build credit is yes. The hack on how to not get negative scores with Sezzle is to simply make all your payments on time.
Sezzle doesn’t have any stakes here. If you are on time, they will report it. If you are late with your payments, they actually do help you wipe it off your record if you pay it within 30 days.
- If you have a payment due on August 10 and pay it within September 10, Sezzle will have to report your due at the end of September. If you make the payment within the time period, the bureaus won’t see it reflected on your record.
- As long as you continue to fail or be late with your payment even over 30 days, Sezzle will have to continue reporting it every month.
- You should never be late with your payment over 90 days. It will have a massively negative impact on your credit score.
If you are not a Sezzle Up user, you don’t have to worry about your Sezzle score at all. Sezzle won’t report your on-time payments or late payments if you are a regular Sezzle user.
Credit scores point aside, Sezzle charges you a fee of $10 when you are late with your payment. They push the due date back by 48 hours and deactivate your account temporarily. You have to pay the fee along with the installation amount to reactivate your account.
How to upgrade to Sezzle Up?
If you want to use Sezzle to build credit scores, you have to upgrade to Sezzle up.
You can’t pay your way into a Sezzle Up membership. Instead, you have to show your reliability to Sezzle.
- Link your bank account to Sezzle along with more than one debit card. You should add as many payment methods as you can, but especially your bank accounts, for Sezzle to find you reliable.
- Pay your installments on the due date or before it. This will increase your Sezzle spending limit too.
- You are first upgraded to a $500 spending limit when you become a Sezzle Up member. As you continue to make timely payments, you reach the $750 spending limit. The maximum amount allowed for Sezzle Up on credit is $2500.
- Verify necessary information about you such as your legal name, age, address, and Social Security Number.
As long as you show up with payments consistently on Sezzle, you should get a Sezzle Up promotion.
When Should You Use Sezzle to Build Credit?
Now that you know the answer to does Sezzle build credit is a ‘Yes’. You must be wondering, What makes the ideal platform for building credit, though?
- Sezzle is a revolving line of credit. If you have no credit history, using Sezzle Up allows you to build a credit score. A good credit score will allow you to take bigger loans in the future.
- If you have a bad credit history, you can use Sezzle to make a purchase when other sources of credit won’t allow you to. You can even use Sezzle to rectify your bad credit history.
- Sezzle does not charge you a thing. If you make timely payments, you don’t have to pay any kind of extra fees. If you want small loans without paying interest for them, Sezzle is your friend.
Frequently Asked Questions
1. Where can I view my credit scores?
Sezzle users usually use Credit Karma to check their credit scores. However, there are plenty of other platforms you can use for this purpose.
2. Can I have Sezzle Up report my payment activity?
Once you become a Sezzle Up member, Sezzle will diligently report your payment activity. If you don’t want Sezzle to report it, you have to close your Sezzle account completely.
You should clear your due payment before you close your account, otherwise, Sezzle will send the last snapshot to the bureaus.
3. Can I reschedule my payment?
Sezzle allows you to reschedule your payment three times for every order. However, you have to pay a fee of $5 for each reschedule.
Even though Sezzle is for small, low-cost orders, the answer to does Sezzle build credit is a yes. Since the payments are spread out, it helps you stick to your monthly budget when you have something you particularly like and want to buy immediately. However, if you are an overspender, buy nature, it is better to pay in cash.
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