Amazon now lets you pay later when buying anything over $50 - here's how that can impact your credit score

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Customers shopping on Amazon are now able to finance items over $50, thanks to a new partnership with Affirm. Tom Williams/Getty Images
  • Amazon now allows customers to pay later using Affirm financing tools.

  • Affirm runs a free "soft credit check" that does not impact your credit score.

  • The firm doesn't charge late payments on loans, but delinquent payments will ding your credit score.

  • See more stories on Insider's business page.

Customers shopping on Amazon can now finance items of more than $50, thanks to a new partnership with Affirm - and those purchases won't affect your credit score.

If you choose to use Affirm to finance your Amazon order, Affirm says it will run a "soft credit check" to determine the amount you can pre-qualify for. Such "soft" credit checks are commonly used by potential creditors (or employers) in cases that don't reflect specific applications for credit.

"Each time a customer selects Affirm as a payment method at checkout on Amazon.com, they will go through a quick real-time credit decision process for each new order," a spokesperson for Affirm told Insider. "This is a soft credit check that does not impact a customer's credit score and does not cost anything. It enables Affirm to lend to consumers responsibly, while giving payment flexibility to as many people as possible."

Affirm says that it will not report loans to Experian if the loan is 0% and set up on 4 biweekly payments, or if you're only offered a three-month payment term with 0% at the time of the application.

The only factors that could affect your credit score are missed payments, your credit history using Affirm, how much credit you've used, and how long you've had credit.

During the pandemic, companies like Affirm, Afterpay, and Klarna have becomes increasingly popular with people who may not have the money to pay the upfront total, but still want to make a purchase. Point-of-sales companies are more inviting to customers than credit card companies because of the lesser impact on credit scores.

"By partnering with Amazon we're bringing the transparency, predictability and affordability that Affirm provides today to the millions of people who shop on Amazon.com in the U.S.," Eric Morse, senior vice president of sales at Affirm, said in a press release. "Offering Affirm's alternative to credit cards also delivers more of the payment choice and flexibility consumers on Amazon want."

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