Does Zippay Affect Your Credit Score?

Overview:

1. Understanding Zippay
2. Credit Score Basics
3. Zippay and Credit Score
4. Strategies For Maintaining A Healthy Credit Score
5. Get Into Good Habits Now For A Healthy Financial Future

First things first. Does Zippay affect your credit score? Yes, it can. To understand why, let’s first look at what Zip Pay is and how it works.

What Is Zippay?

Zip Pay is a buy now, pay later finance arrangement. Think of it as a digital update of the traditional “lay-buy” service. However, instead of paying for your goods before you take them home, Zip Pay and other BNPL providers let you receive your goods or use your services now and pay them off over four equal fortnightly payments.

Customers use Zippay for a variety of reasons, ranging from:

• Online or in-store shopping
• Booking a weekend trip away
• Doing minor or major renovations to the house
• Car repairs at the mechanics

Among the common features of these services are no establishment fee (with select accounts), interest-free options and a consistent payment schedule.

The terms “credit score” and “credit rating” are interchangeable and refer to the measure of risk that you, as a prospective borrower, present to a lender who may offer you a loan. Here’s how it works. 

What Is A Credit Score? 

In Australia, a credit score is a number between zero and either 1000 or 1200 (depending on the credit reporting agency) that informs lenders whether or not you’re a low or high risk applicant for credit. The lower the score, the higher the risk that they deem to you be. 

The Key Factors in Calculating Your Credit Score

MoneySmart lists several key elements that come into play when calculating your credit score. They include:

• How much money you’ve borrowed. 
• How many times you’ve applied for credit or a loan.
• Your repayment history (paying on time can increase your score, while late or missed payments can result in a decrease). 
• The length of your credit history
• Current level of debt

These factors will all determine the credit rating you ultimately receive in your credit report. This is how Equifax breaks them down:

• Below average: 0 to 459
• Average: 460 to 660
• Good: 661 to 734
• Very good: 735 to 852
• Excellent: 853 to 1200

A lower score will almost certainly impede your chances of successfully applying for a loan or a line of credit.

Buy Now, Pay Later services like Zippay are now regulated under the National Consumer Protection Act. 

This means that when you apply for a BNPL service, it may appear on your credit report. Before 10 June 2025, when the new regulations took effect, that may not have been the case. 

Credit Checks For Buy Now, Pay Later Services

One of the biggest changes to the tighter regulations that affect Zippay and other BNPL lenders is the stricter application requirements. As an applicant, you may need to provide more information than in previous situations. 

For example, you may need to provide income details or agree to a credit check. Zippay will carry out these checks to learn your borrowing history and assess your suitability as a borrower in this instance.    

Payment History

Payment history is arguably the biggest factor in determining the quality of your credit score. Your history takes into account every credit account held in your name over the last two years and considers the repayment amount, due dates, how regularly you’ve paid any existing debts, and whether you’ve missed any payments.

Make your required payments on time, and your credit score will remain strong. Miss your payments, or pay them late, and expect your score to drop. 

If you miss a payment for a Buy Now, Pay Later service, it will impact your credit score.

A healthy credit score is essential to help you secure financing. Whether you apply for a loan for a rental bond or even an emergency loan to get you out of a bind, a strong credit rating will help your application be approved.

Securing a personal loan can also help you maintain a healthy credit score – if you make your repayments on time. By meeting your repayment obligations, you will often see your credit rating improve.

One of the easiest ways to build your credit score is by making your credit card payments on time. Other helpful strategies to build your credit rating without a credit card include:

• Checking your credit score every three to six months.
• Paying your bills and rent on time.
• Keeping your credit applications to a minimum; each one impacts your credit score.

Each of these demonstrates that you are a good credit risk and can often make loan applications easier.

Get Into Good Habits Now For A Healthy Financial Future

While buy now, pay later providers like Zip Pay can be immensely helpful at a certain moment, it’s important to understand how their services affect your future. The last thing you want is to find out that a missed payment here or a late payment there has affected your loan application success in the future.

By making your payments on time and being prudent with how you use their services, you’ll be able to keep your credit score healthy and your financial future strong.

Can late repayments on Zippay affect my credit rating?

Like any line of credit, late or missed repayments on your Zip account can negatively affect your credit score. Zip Pay can advise credit reporting agencies of any missed or late payments, which will be reflected as a drop in your rating. By upholding your repayment obligations, you can keep your credit profile strong.

Can Zip mess with your credit?

Applying for a Zip account, or any Buy Now, Pay Later account, can affect your credit rating. BNPL providers take into account factors such as multiple attempted applications and late or missed payments. They may report these to credit bureaus, which can negatively impact your rating.

How can I increase my credit score in Australia?

There are numerous ways to improve your credit rating. Paying your bills on time, whether it’s utility bills or even your phone bill, is a quick win that will improve your standing. Restricting the number of applications you make also helps. Paying off your monthly credit card bill, either in full or higher than the required minimum payment, also works in your favour.

The information provided in this blog is of a general nature and is provided without considering your specific objectives, financial situation, or needs. It is intended for informational purposes only and should not be relied upon as financial, investment, or other professional advice.

Before making any financial decisions or taking action based on the information presented, you are strongly encouraged to assess its appropriateness in light of your individual circumstances. Red Tree Finance does not intend to provide personalised financial advice, and you should seek independent financial, legal, tax, and other relevant advice tailored to your unique situation.