What Credit Score Do You Need for Affirm Approval?

Americans are already heavily in debt. Buy Now, Pay Later plans offer another way to pile on even more debt. We’ve all wanted something out of our budget or an impulse buy. Affirm is a service that allows you to buy that item, take it home with you immediately, and make installment payments. But what credit score do you need to be approved for an Affirm payment plan?

It’s complicated, but you have a very good shot if your credit score is above 640.

But if your score is lower than 640, you still could get approved. Read on to learn more.

What is the minimum credit score you need to use Affirm payment plans?

Affirm is a well-known Buy Now, Pay Later (BNPL) company. Many of these companies offer plans that allow you to purchase items and spread out the payments over four installments. Affirm has that option but also allows you to extend the payment period, and charges interest for that option. Unfortunately, not everyone realizes that when they’re facing an expense they otherwise wouldn’t be able to afford.

Affirm approval odds: According to Affirm.com, you are “more likely to be approved” with a score of 640 or above. However, there have been reports of some borrowers with credit scores around 550 being approved. There’s a possibility of approval if your score exceeds 600, but that will depend on factors like your revolving balances and how many hard inquiries are on your credit report. Factors like payment history and whether you’re near your credit limit will make a difference.

Affirm at a glance

Loan amounts	$50-$17,500
Minimum credit score	None stated, but reports show borrowers will need a minimum of about 550 for approval
Interest charges	0% for Pay-in-Four plans, 30% APR for monthly plans
Credit check	Yes, a soft one that won’t affect your credit score
Payment structures	Pay over four installments, monthly payment plan
Late fees	None, but a late or missed payment could affect your credit score
Other fees	None
Availability	Online and in brick-and-mortar stores
Payment rescheduling	No
Account pause after missed payment	No

Other Affirm loan approval factors

Your loan application may also be affected by any or all of the following:

• Your credit scores
• Your credit utilization ratio
• Your payment history with Affirm, including overdue payments, deferred payments, and loan delinquency
• How long you’ve had an Affirm account
• The number of loans you currently have with Affirm
• Verification of your income and debt obligations and recent bankruptcies

Do Affirm loans appear on credit reports?

Affirm is one BNPL provider that does report information. If you received an installment loan with an interest rate of 0% with four bi-weekly payments or over three months, it likely will not appear on your report, as long as you make your scheduled payments on time. In all other instances, Affirm installment loans will show up on your credit report with Experian. Each Affirm application is evaluated as a separate, closed-end transaction so that you can have several Affirm loans open at once.

Does Affirm approve borrowers with bad credit?

Technically no. You’ll need “fair” credit to be guaranteed approval for an Affirm loan. However, reports indicate that it is possible for you to be approved for an Affirm payment plan with bad credit. Bad credit is usually a score of 580 or below. Reports from customers say they have been approved with credit scores hovering around 550. Other factors, including previous history as an Affirm customer and a solid payment history with Affirm will work in your favor if your credit score is below 600.

Does Affirm check credit?

Yes. When you apply, Affirm conducts a soft credit check through Experian, one of the three major credit bureaus. A soft credit check will not affect your credit score. 

Will Affirm boost your credit score?

Because Affirm reports its longer-term loans to the three major credit bureaus, making on-time payments can help boost your credit score. But if you miss payments or make late payments, it can also hurt your score. And one single late or missed payment can stay on your credit report for up to seven years.

Since these purchases are considered loans, they will affect your debt-to-income ratio. It’s essential to your credit score because lenders use DTIs and other aspects of your financial profile — like your credit history — to evaluate whether to give you a new loan and determine lending limits.

What makes Affirm different?

Affirm is a point-of-sale payment plan. You’ll get an option at checkout, in-store or online, to pay for your purchases in installments. Affirm is one of several companies offering these plans. Others include Afterpay, Klarna, and PayPal Pay in 4. These companies are known as Buy Now, Pay Later (BNPL) or Pay-in-4 plans. 

These new-ish financing options are similar to old-school layaway plans, but you get to take the item home immediately before it’s been paid in full. It splits the purchase amount up into four or more payments.

With a layaway plan, the consumer gives an installment deposit towards the product’s sale price and makes subsequent installments while the store puts the item on hold. The product is turned over to the consumer when the last payment is made.

Affirm is different from most other BNPL companies because you can split your total into more than four payments. However, you need to use caution because, unlike similar companies, Affirm charges interest on some plans. The interest charges can often be an unpleasant surprise for users who’ve used similar companies. Make sure to read the terms and conditions carefully.

How does Affirm work?

Affirm is a loan company that allows users to buy goods or services offered by online merchants and pay off those purchases in fixed monthly payments.

When you get to the checkout, you’ll be offered the option to split up your payments. Or you can get a virtual Affirm card in the Affirm app. According to the Affirm website, the minimum loan amount to use Affirm payments is $50, while the maximum is $17,500.

Does Affirm charge interest?

Yes and no. Affirm doesn’t charge interest if you pay in four installments. However, if you finance your purchase over an extended period, you will pay up to 30% APR.

Which retailers use Affirm?

Here are a few popular retailers that offer financing through Affirm:

• Adidas
• Best Buy
• Delta Vacations
• Expedia hotels and vacation packages
• Neiman Marcus
• Nike
• Peloton
• Pottery Barn
• Purple
• Saks Fifth Avenue
• Target
• Walmart

What’s the problem with Buy Now, Pay Later?

According to a report by the Consumer Financial Protection Bureau (CFPB) 64% of Buy Now, Pay Later (BNPL) users have incomes of less than $50,000 per year, and 81% have incomes of less than $75,000, according to an industry study by Cardify. And previous survey findings by DebtHammer show that 30% of BNPL users have e struggled to make the payments and had to skip paying an essential bill to avoid defaulting on their payment plan.

When the economy was booming, companies like Affirm soared. But now Buy Now Pay Later companies are grappling with increased defaults as inflation and interest rates climb. In February 2023, Affirm laid off nearly 20% of its workforce.

Should I use a BNPL plan?

It depends. Buy Now Pay Later can be a great way to cover an emergency expense that you may not be able to afford in full right away without having to turn to a short-term lender. For example, if your computer dies and you have no way to work without one, you can go to Best Buy or Walmart and finance a new one. The danger with BNPL is when it’s overused, and people end up struggling to make multiple payments every other week or when you finance something over a long term.

Pro tip: The goal is to only sign up for one Buy Now Pay Later plan at a time. When that first item is paid off, you can take on a second one and repeat the process. But if you buy five or six items at once and agree to pay them off in $20 increments, suddenly you’re paying $100 to $120 every other week, and that’s causing a lot of Americans to struggle. With Affirm, it’s best to stick to the no-interest four-payment plan if you can afford it. However, if you can’t, just be aware that Affirm charges interest. But despite that added cost, Affirm can be an affordable way to get an item you need immediately and pay it off at a lower interest rate than what you’d pay for a payday loan, title loan or some personal loans.

Affirm real-world experiences

Many of the complaints about Affirm are similar. Customer comments primarily cite problems with items that were returned, or paying interest borrowers didn’t know about.

The biggest problems appear to be using Affirm for travel expenses like airfare and hotels. If the trip runs into a complication that requires you to be refunded by an airline or other travel platform, the money isn’t always returned seamlessly. There can be confusion and long waits. And buyers won’t have the same protections offered through credit cards, like chargebacks for items that are faulty or lost in transit.

The other is interest. Many people see the option to pay with Affirm and assume there is no interest because the “Pay in Four” option is advertised as interest-free. But when at checkout they’re offered the option to pay over a longer term, not everyone realizes that interest kicks in.

For example, one Affirm user charged a subscription that cost $1,000 per year. Affirm gave her the option to pay over 18 months. Not only did she end up paying 30% interest, but when it came time to renew her subscription the following year, she still owed six payments on the original and ending up having to make double payments for six months. 

Make sure that if you commit to a BNPL plan, you can afford the payments you agree to. Otherwise, you’ll end up paying extra fees and end up hurting your credit score further.

How to apply for financing through Affirm

Affirm works with hundreds of major retailers. Applying is easy and can be done at checkout, either in person or online. If you want to save time during checkout, you can use the Affirm app to prequalify for a virtual card, which works like a debit card. You can use this card both in-store and online.

Personal information

Affirm asks for a few pieces of personal information: 

• Name
• Age (you must be 18 or older in most states, including U.S. territories)
• Valid mailing address
• Email address
• Mobile phone number
• Date of birth
• The last four digits of your social security number

Affirm uses this information to verify your identity and make an instant loan decision.

Affirm or Afterpay: Which is better?

Afterpay is an Australian-based BNPL company that competes directly with Affirm. The difference is that Afterpay only offers four-payment plans repaid over six weeks (the first payment is made at the point of purchase and serves as a down payment, then you make biweekly payments.) Afterpay does not charge interest. Afterpay does charge late fees: $8 or 25% of the transaction, whichever is less. Afterpay does not do any credit checks, so eligibility is open to everyone, but if you miss payments, you’ll incur late fees. Afterpay is accepted by 100,000 retailers globally.

In a May 2022 press release,  Affirm’s CEO cites that the number of active merchants on their platform grew from 12,000 to 207,000 year over year, and active consumers increased 137% to 12.7 million people. Affirm is a revenue generator and marketing accelerator for more powerhouse merchants like Walmart, Neiman Marcus, Target, Priceline, Vrbo, Ikon Pass, Theory, Williams Sonoma, and many more.

So, depending on which retailers you shop at and which payment plan and interest rate are more beneficial to you, it will dictate whether Affirm or Afterpay is a better fit. Read the fine print before committing to anything.

Is Affirm better than a credit card?

Maybe. A balance transfer credit card would be better financially, but qualifying for one of those can be challenging if you have bad credit, and it can take time for the card to arrive in the mail. Depending on the expense, you may not be able to wait 7-10 business days for a credit card to arrive. The interest rate charged by Affirm may be lower than what you’d pay a credit card company, mainly if you already carry a balance on the card.

With Affirm, you always know what you’ll owe. 

With credit cards, the longer you take to pay off your balance, the more expensive your purchase becomes. Interest rates for Affirm loans can range from 0% to 30%, which can be greater than the highest APR on most credit cards, but 43% of loans taken out at Affirm have a 0% APR, according to the company.

Should you use Affirm?

If you need to make a large purchase immediately and can’t afford to pay it off over four payments, Affirm can be a good option for people with credit scores of 550 and up. The interest rate it charges is far lower than what you’d pay a payday lender or even an installment loan for bad credit borrowers.

Also, keep in mind that some of the common issues associated with using the Buy Now Pay Later service can include: you being banned from making future purchases until you are caught up on all your late payments, the chances of overdraft fees by your bank are common due to automatic payments, it’s easy to overextend yourself and get into deeper debt, some come with hidden interest or high late fees, and it comes with far fewer consumer protections.

The bottom line

Sure, BNPL is convenient and easy to use. It has no fees if you make your payments on time and allows you to “afford” that high-ticket item now. But purchasing something you can afford to pay directly is a much more fiscally responsible thing to do. If you must make payments, perhaps the old-fashioned way of layaway is a better option. After all, owning something shouldn’t take precedence before paying essential bills such as rent, electricity bills, food, and other essentials.

The instant gratification of having the next shiny new thing should not outweigh financial stability and fiscal responsibility benefits, such as less stress, better health, and more freedom. Especially when 73% of people listed money as the number one factor affecting their stress level, according to the American Psychological Association, the choice is pretty straightforward.

FAQs