PayBright is a popular Canadian payment platform that allows shoppers to pay for their purchases in installments (i.e., buy now, pay later (BNPL) payment method). Shoppers who want to buy products but cannot afford to pay for them upfront normally use the PayBright platform. The installment plan allows them to spread the cost of their purchases over a certain period of time.
However, one question that often arises in the minds of users is whether PayBright affects their credit score. The answer to this question is not straightforward, but in this article, we will explore the impact of PayBright on your credit score.
PayBright Overview
PayBright is a payment platform that allows users to offer buy-now and pay-later payment methods. The platform is available at over 7,000 retailers across Canada, including popular brands like Best Buy, Sephora, and Wayfair. PayBright works by partnering with retailers to offer shoppers installment payment options at the checkout.
Hence, when a shopper chooses to use PayBright, they are automatically opting for a loan. PayBright finances the purchases while you repay them in installments over a specified period. The repayment period is not fixed, though it may range from a few weeks to several months, depending on the retailer and the value of the item(s) purchased.
Does PayBright Affect My Credit Score?
The answer to this question is not straightforward. If you are using a ‘’pay monthly’’ option, your credit score may be affected, but if you’re using the “Pay in 4” payment option, your credit score won’t be affected.
Let’s shed more light on it. PayBright may affect your credit score negatively if you use the Pay Monthly option. Though the effect may be minimal,. The Pay Monthly option allows users to make automatic monthly installment payments that could be spread over six to sixty months.
PayBright will run a check on your credit first to ensure that you’re eligible for the loan offer. This check will lead to a hard credit inquiry, which will definitely show up on your credit report, hence having a minimal negative impact on your credit score. Additionally, your repayment activities will be reported to credit bureaus in Canada, viz., Equifax and TransUnion. Hence, repaying your loan on time monthly would definitely boost your credit score because you are showing trustworthiness with credit. But if you’re inconsistent in repaying your loan as agreed, it will definitely affect your credit score negatively.
Meanwhile, if you opt for the PayBright “Pay in 4” payment option, your credit score won’t be affected in any way. This is possible because PayBright will run a check on your credit by performing a soft credit inquiry. This soft inquiry will be used to verify your information but the check doesn’t have any negative effect on your credit score. All in all, the Pay in 4 option doesn’t affect your credit score.
PayBright Working Principle
PayBright pays completely to the retailer for all the goods you purchase. After that, PayBright then collects your payments in installments, depending on the option you choose. The two options available for users at PayBright are:
1.Pay Monthly Method
In this repayment plan, users are allowed to take out an installment loan, but the interest rates are normally negotiated. However, the interest rate to be negotiated ranges from 0% to 21.95% APR, depending on the buyer’s credit score. Additionally, buyers will also pay a processing fee, which normally ranges from $1 to $4 for each transaction.
2. Pay In 4 Method
In this option, buyers pay off their loan on a four-time basis. But your first installment will be made at your check-out, while the remaining three-time payments will be made later. Interestingly, there are no processing fees or interest charged on your purchase amount. For instance, let’s assume you purchased an item worth $400. Instead of paying the $400 at once via your credit card or other means, PayBright will permit you to make four payments of $100.
Conclusion
Using PayBright may or may not affect your credit score, depending on the method you opt for. The Pay Monthly method may affect your credit score since it involves running a hard credit check on your credit, which would be recorded in your credit report but using the Pay in 4 method won’t affect your credit since it only involves a soft check on your credit. The choice is yours to make.
