Zip Pay/Latitude Pay affecting credit score

harrylovevee on 27/12/2020 - 14:11

Hi all,

It might be too late now since everyone must signed up the Zippay/Latitude to maximise the benefit for Black Friday or Boxing Day sales as a loyal Ozbargainer.

However, it might still help some people in the future.
After reading this,
https://www.dailymail.co.uk/news/article-9029537/Shopper-cla…

I went on checking my recent credit score, from Creditsavvy, my points remains the same but from Get Credit Score, my points dropped nearly 100 in December (I applied both Zippay and Latitude Pay around end of November)

I'd probably still go for it even I know this would impact my score this much (at least I saved $500-$1000 throughout these promotions) but if you're planning to get a home loan or renew it, probably need to think twice…

Wouldn't expect a $1000 credit x 2 could hurt your score this much lol

Shop Safe!

Financial

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Zip Pay
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Comments

  • MS Paint on 27/12/2020 - 14:15
    +5

    Did you nor realise this before/as you signed up?

    • harrylovevee on 27/12/2020 - 14:19
      -3

      I did expect some impacts but not for 100 pts for $1000 credit lol

  • brendanm on 27/12/2020 - 14:16
    +9

    It's likely not the amount, but the type of service. People who use these things generally aren't the best with money.

    • harrylovevee on 27/12/2020 - 14:20

      Makes sense, wish they know we're from Ozbargin XD

    • Nillionaire on 08/11/2021 - 23:46

      That's such a shitty presumption to operate on for those of us that are sensible with money but still like to use these services. There's no downsides to them if you are disciplined enough to make simple payments on time. But credit bodies just assume otherwise for merely using the service. :/

      • brendanm on 09/11/2021 - 07:20

        Thanks for the comment a year on.

  • AustriaBargain on 27/12/2020 - 14:19

    Afterpay and Zippay are ubiquitous now, so everyone's score will be lowered by 100 points, thus your relative credit score will remain the same.

    • netjock on 27/12/2020 - 16:33

      so everyone's score will be lowered by 100 points

      Like everyone also gets the same pay rise, pay etc. We're turned into a Communist country by association. China must have slipped something into our money.

      • AustriaBargain on 27/12/2020 - 17:38

        Mmm, some people will always be far away from the minimum hourly rate. I've seen someone who makes six figures a year complain that minimum wage is too high. No employees or anything, they just think people deserve less. But you could double minimum wage and it wouldn't affect a lot of our pay because some of us, not me, already make a lot more than that.

        • netjock on 27/12/2020 - 18:28
          -1

          You might be over reading into my comment. Using "everyone" in a statement is overstating the possibility. It is like everyone is buying houses at 80% LTV, everyone is buying cars on loan etc. Not everyone would qualify for Latitude and Zip.

  • Neoika on 27/12/2020 - 14:34

    Get Credit Score uses Equifax report?

  • FromAtoZ on 27/12/2020 - 15:01

    It is strange that both did not affect my credit report.

    Mine dropped 25 pts in Oct/Nov due to a CC application with Anz (and rejected).

    Zip/lat pay were recorded against “opportunity” but not “hurting” factor on my report.

    • harrylovevee on 28/12/2020 - 02:28

      Interesting, do you use Get Credit Score?

  • jimbobaus on 27/12/2020 - 15:17
    +4

    Lucky your score is a made up number created to sell you credit products and not an actual reflection of your likelihood to get credit.

    • friedsnowdays on 28/12/2020 - 08:18
      -2

      Well this is not correct. Your credit score is created by a mathematical model that estimates your probability to default on a loan. It can absolutely reduce the likelihood you get credit from a bank or financial institution.

      • jimbobaus on 28/12/2020 - 08:46

        Except banks and lenders have their own criteria and do not use these made up numbers at all.

        Recently got a home loan and asked them directly and they were pretty clear that the credit score on these sites is irrelevant when determining whether you get approved or not.

        The scores are literally marketing tools for the reporting agencies to sell your info to lenders who in turn market credit products to you.

        • El-Rhi on 29/12/2020 - 17:23

          I work in the banking industry and can say for certain that many financial institutions will use the credit bureau score in their lending decisions. It’s definitely not the be all and end all, but it is factored in. Biggest thing is serviceability though.

  • FW190 on 27/12/2020 - 15:17

    my getcreditscore went up by 20 after I have applied for a new CC in Oct, really makes you wonder how they calculate this score………. (I did also cancelled a card in Nov, not sure if that has anything to do with it?)

  • eggles01 on 27/12/2020 - 16:47
    -2

    I only use afterPay and have had many deals with them up to $1000 and have not had anything done to my credit file or credit score,Zip pay is really a credit card pay the entire amount by the end of the month or you are charge a monthly fee,,
    Credit file/scores—I had a $3000 bank loan repayable over 36 monthly payments,I made a bulk payment of the last 6 month payments and finalised 5 months before the last payment was due,and as I was not required to make the 5 monthly payments Equifax penalised me because I never made those 5 monthly payments,they did not recognise that I had finalised the loan 5 months earlier and they continued to reduce my credit score each month because I never made payment for those 5 months,when I was successful with getting the loan I lost 120 points off my credit score,before I applied for loan I had the top credit reporting agencies credit scores with excellent in each one,ever since I paid the loan out 5 monthe earlier than expected my credit scores have only been Very Good,so although I was sucessful getting the loan and perfect paying before monthly date and finalising the loan early,why do I have a lesser credit score than I had before I applied for the loan,I believe something is very wrong in the way Equifax operates and the credit reporting agencies operate,it just means when you do the right thing,you are penalised for doing the right thing.

  • friedsnowdays on 28/12/2020 - 08:34
    +1

    A general FYI for people who are confused about credit scores.

    1) There are multiple companies that create their own credit score, such as Equifax and Experian. These companies will base your score on information they collect from companies that report to them (i.e. banks).

    2) Credit scores are used to help companies estimate whether you as a customer are likely to pay back a loan they give you. Risky behaviour, like taking out a payday loan or having lots of credit cards, will cause your score to go down. Understand that if you choose to do something like churning credit cards for points, or opening lots of BNPL accounts for promotions this may cause your score to go down. Maybe you are doing this for a benefit but the other people who display this behaviour are risky so you will be grouped in with them.

    3) That being said if your score goes up/down by a small amount it's not a big deal. The scores are calculated using particular windows, such as the number of applications you made in a 12 month period, so as time goes by your past actions will reduce in importance and your scores will continually change.

    4) Larger financial companies will have their own scores on you, especially if you have a bank account with them or have had a loan with them in the past. This may give you a better chance of getting a loan if you have a poor credit score externally but you have a stable job and are responsible.

    5) The main worry you should have about your credit score is if you have a rating that is rated as AVERAGE or worse. Most companies just use credit scores to filter out bad customers (i.e. those with poor scores) however some companies, especially fintechs, will give better rates to customers they think are lower risk (i.e. those with good scores).

    • jimbobaus on 29/12/2020 - 20:12
      -3

      This is literally not what happens.
      Lenders have their own criteria and scores have nothing to do with it.
      Your score is a made up number by credit reporting companies so they can get you to check your score monthly. By logging in each month you rest your permissions for them to share you info with lenders that pay them a commission if you borrow money.

      They are a marketing gimmick and have no basis in your actual likelihood to get a loan.

  • whooah1979 on 28/12/2020 - 13:47
    -1

    Credit scores are just another tool used by legacy lenders to control how and what people spend their money on. Retail borrowers may in time be able to bypass this discriminatory credit score system in favour of a system where they can get a loan without being subjected to unfair metrics.

    This type of lending has been available for a long time to high net individuals. They get loans by providing high-value collateral without the need to show proof of serviceability. COVID played a major part in the adoption of this type of lending and making it available to normal borrowers.

    • FW190 on 31/12/2020 - 19:09

      This type of lending has been available for a long time to high net individuals. They get loans by providing high-value collateral without the need to show proof of serviceability.

      in other words……… pawn store for the rich and famous? :)

  • johninmelb on 28/12/2020 - 17:44

    I applied for Afterpay in December last year and was accepted. There is no mention of it on either of the two credit agency's reports. Both my monthy credit reports have me at the lower end of Exellent and this hasn't changed for ages, despite a long record of on time payments etc, no debts, no judgements, and whatever else.

    There is however 2 CC applications, one in 2017, and one in 2018 which will stay on file for 5 years. The 2017 application for for Amex, and I got the card. The second was for Qantas Card and Citibank refused it. I can only hazard a guess and say that is what is holding me back from improving my score to the top end of Excellent.

    Well aware it means nothing, and certainly not for me, as I am 70 years old, not working, only on part age pension and a small super payment, so getting a new credit card is impossible. I only got the Amex card because I fought them over it. However, presumably after I had "proved" myself, they offered me a better card. But none of this gets reflected on my credit file of course, other than the long record of on-time payments.

    I will probably not use Afterpay as I have no real need for it, but I decided to sign up to it as it is just an extra tool that might come in handy one day. There may come a time when these sorts of things will not be so easy to get. Always best to be prepared and think ahead.

    • El-Rhi on 29/12/2020 - 17:28

      No credit enquiry is done for AfterPay, so you won’t see it on your credit report.

  • randomusername2017 on 28/12/2020 - 18:58

    Pretty sure both these products can only negatively impact your credit rating/ bureau made up score.
    Don't think they are covered by CCR and only negative events such as defaults or missed payments are reported.. not on time payments etc

    Interestingly Lattitude pay account was a significant hit to the artificial score, nothing listed for Zip as yet.

  • Jojorabbit on 03/01/2021 - 16:46

    Is there a way to reverse this? (signed up for both latitude pay and zip pay)

  • USER DC on 08/11/2021 - 11:28

    Surprisingly enough My credit score went up after applying for line of credits (credit cards) and up as well after getting approved for Zip (i accidentally applied for Zip money a few years ago and was denied for that).
    But it went down whenever i applied for telcos, or ISP's credit check they have hurt me most

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