Does Sezzle Build Credit?

In recent years, buy now, pay later (BNPL) platforms like Sezzle have become a go-to option for flexible payment plans, especially for those wanting to spread out the cost of purchases. As the demand for BNPL continues to grow, many users wonder, “Does Sezzle build credit?” While the answer isn’t straightforward, there are ways Sezzle can affect your credit, even though building it directly may not be part of the platform’s core design. Below, we’ll break down how Sezzle works, what it means for your credit score, and how to make the most of it if credit-building is your goal.

[Related: buy tradelines from us or read the “Resources” section below]

How Sezzle Works and Its Impact on Credit Scores

Sezzle’s Buy Now, Pay Later Model

Sezzle offers a BNPL service that allows you to make purchases and pay them off over six weeks, interest-free. Unlike traditional credit cards, where interest accrues on unpaid balances, Sezzle splits your payments into four equal installments with no fees, provided you pay on time. This feature can be a useful way to manage cash flow for large purchases without the burden of interest rates that credit cards often carry.

Sezzle does perform a “soft” credit check to verify identity, which does not affect your credit score. However, unlike traditional loans or credit cards, these installment loans aren’t usually reported to credit bureaus. This is a significant difference because credit-building requires activity that appears on your credit report, such as timely payments on credit accounts.

Does Sezzle Build Credit? The Limitations

While paying through Sezzle can help you manage finances, the direct impact on your credit score is limited. Because Sezzle doesn’t report installment payments to the major credit bureaus (Experian, Equifax, and TransUnion), the company’s standard service doesn’t contribute positively to your payment history—a critical component in building credit.

However, Sezzle introduced a product called “Sezzle Up” that changes the dynamic for those looking to improve their credit scores. When using Sezzle Up, eligible users can opt to have their payment history reported to credit bureaus, which can positively influence their credit profile if they consistently make on-time payments.

What Is Sezzle Up? A Pathway to Credit Building

Sezzle Up vs. Standard Sezzle Accounts

Sezzle Up is an upgraded version of a standard Sezzle account that offers a way to build credit. With Sezzle Up, your payment history is reported to credit bureaus, allowing your timely payments to be recorded as part of your credit activity. By enabling this feature, Sezzle users can benefit from responsible use of BNPL and see a potential boost in their credit score.

To qualify for Sezzle Up, users generally need a good track record with Sezzle, demonstrating they can manage installment payments responsibly. Once eligible, users have the option to activate this feature, after which Sezzle begins reporting their payments. This can contribute to improving your credit score, especially if you’re starting with limited credit history.

The Potential Benefits of Sezzle Up for Building Credit

If you qualify for Sezzle Up and use it consistently, there are some notable credit-building benefits. Payment history, which accounts for around 35% of your FICO score, is an essential factor in creditworthiness. When Sezzle reports your payments to the credit bureaus, timely installments can help establish a solid record of repayment, which may boost your credit score over time.

However, it’s essential to remember that missed payments on Sezzle Up can have the opposite effect. If you fail to make payments on time, it could negatively impact your credit, making responsible use of Sezzle Up crucial if credit-building is your goal.

Pros and Cons of Using Sezzle for Credit Building

Advantages of Using Sezzle and Sezzle Up

1. Flexible Payment Option Without Interest: For most users, the appeal of Sezzle lies in its fee-free, interest-free payment plan. With proper budgeting, it allows you to break up purchases into manageable installments, which can be particularly useful for larger purchases or budgeting purposes.
2. Credit-Building Potential with Sezzle Up: Sezzle Up gives users an opportunity to turn their BNPL purchases into a credit-building activity, a feature unique to Sezzle among BNPL providers. This added layer allows for credit improvement without taking on new debt.
3. Soft Credit Check: For those with thin credit files or credit challenges, Sezzle’s soft credit check is a way to gain access to installment payments without affecting their score.

Drawbacks to Consider When Using Sezzle to Build Credit

1. Limited Credit Impact with Standard Sezzle Account: If you only use the standard Sezzle account without upgrading to Sezzle Up, your payments won’t impact your credit report. This can be a setback if credit-building is your main goal.
2. Risk of Credit Damage with Late Payments: While Sezzle doesn’t charge interest, missed payments can incur fees and negatively impact your Sezzle Up credit history if you’re late. As with any credit-related tool, using it responsibly is critical.
3. Not a Replacement for Traditional Credit Tools: While Sezzle Up offers a credit-building alternative, it doesn’t replace traditional credit lines, such as credit cards or loans, which might offer more substantial benefits for long-term credit improvement.

Tips for Responsible Use of Sezzle and Sezzle Up to Maximize Credit Benefits

Manage Your Budget Carefully

To make the most of Sezzle, it’s essential to stay within your budget. Setting up alerts for due dates or automating payments can be especially helpful to avoid missed payments that could harm your credit if you’re enrolled in Sezzle Up.

Consider Using Sezzle as Part of a Broader Credit Strategy

While Sezzle Up can be helpful, it shouldn’t be your only tool for building credit. Combining it with other forms of credit, such as a secured credit card or credit builder loan, can give you a more robust credit profile. Using Sezzle alongside other credit-building options will give you more opportunities to establish a positive payment history across multiple accounts.

Track Your Credit Progress

Regularly checking your credit report and score can help you monitor your progress as you build credit with Sezzle Up. Many credit monitoring services offer free tracking, so you can see the effect your payments have on your score over time. Staying informed will also help you catch any errors that may need to be disputed.

Conclusion

While Sezzle’s standard BNPL services don’t build credit directly, the Sezzle Up feature offers a unique way to turn installment payments into a credit-building opportunity. For those looking to establish or improve their credit score, Sezzle Up provides a path to report positive payment history to the credit bureaus. As with any financial tool, responsible use is key. By keeping up with payments, staying within budget, and using Sezzle Up as part of a broader strategy, you can potentially see your credit score improve.

Resources

The following is a list of resources to start learning about tradelines. We have a list of tradelines for sale, and a tradelines FAQ. Also various posts about tradelines, and a chart of tradeline prices from competitor sites. Finally, a contact form to ask further questions.

Please feel welcome to ask any questions below.

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