How Chase Pay Over Time May Impact Your Credit Score

Chase's Pay Over Time feature offers welcome flexibility for managing large purchases. However, using this plan can influence your credit health, so it's vital to understand the potential credit score implications.

1. Impact on Credit Utilization: When you move a purchase into a Pay Over Time plan, the balance remains part of your card's total outstanding debt. This increases your credit utilization ratio, a key factor that can lower your score if it gets too high.
2. Importance of Payment History: The plan requires a fixed monthly payment. Making these payments on time contributes positively to your payment history, which is the single most important factor in determining your credit score.
3. Consequences of Late Payments: Missing a payment on your plan is treated as a late payment on your credit card account. This negative event can be reported to credit bureaus, potentially causing a significant drop in your score.
4. Effect on Total Debt: While structured, a Pay Over Time balance adds to your overall debt load. Lenders assess your total debt when evaluating your creditworthiness, so carrying this balance can influence their decisions.

How Much Will Chase Pay Over Time Affect Your Credit Score?

While Chase's Pay Over Time feature offers flexibility, its impact on your credit score hinges on how you use it. Here are the key factors to consider.

• Credit Utilization: This feature increases your card's reported balance, which can raise your credit utilization ratio. A higher ratio is often viewed negatively by credit bureaus and can lower your score.
• Payment History: Your payment history is a major component of your credit score. Missing a payment on your plan will be reported to credit bureaus and can have a significant negative impact.

How You Can Avoid Chase Pay Over Time Affecting Your Credit Score

Make On-Time Payments

Consistently making on-time payments is crucial. Late payments are reported to credit bureaus and can significantly lower your score. Set up automatic payments or reminders to ensure you never miss a due date for your Pay Over Time plan and overall card balance.

Monitor Your Credit Utilization

Your Pay Over Time balance contributes to your credit utilization ratio, a key factor in your credit score. Aim to keep your total balance, including the installment plan, well below your credit limit—ideally under 30%—to maintain a healthy financial profile.

Pay Off the Balance Early

While the plan offers flexibility, paying off your balance before the promotional period ends is a smart move. This helps you avoid interest charges and reduces your overall debt faster, which can positively influence your credit score by lowering your utilization ratio.

Ways to Improve Your Credit Score

Improving your credit score is an achievable goal that can significantly impact your financial health, and with consistent effort, it's always possible to see positive changes. While results can vary, most people see meaningful improvement within three to six months of adopting better habits.

• Monitor your credit reports. Regularly check your reports from all three major bureaus to catch and dispute any inaccuracies or signs of identity theft.
• Set up automatic bill payments. Your payment history is the most significant factor in your score, so automating payments ensures you never miss a due date.
• Lower your credit utilization. Aim to keep your credit utilization ratio below 30% by paying down balances or requesting a credit limit increase.
• Become an authorized user. Being added to an account with a long, positive credit history can give your score a boost, provided the account reports to all bureaus.
• Diversify your credit mix. Lenders like to see that you can responsibly manage different types of credit, such as credit cards, installment loans, and mortgages.
• Limit hard inquiries. Space out your applications for new credit and use prequalification tools whenever possible to avoid temporary dips in your score.

The Bottom Line

Chase Pay Over Time can affect your credit score, similar to other financing plans. Your payment history and credit utilization are key factors in determining its impact on your credit health.

Frequently Asked Questions

Does using Chase Pay Over Time affect my credit score?

Yes, it can. Your payment history and the plan's balance, which affects your credit utilization, are reported to credit bureaus and can influence your score.

Does Chase do a hard credit check for Pay Over Time?

No, Chase does not perform a hard credit inquiry to use Pay Over Time since it is a feature of your existing credit card account.

How does a Pay Over Time balance affect my credit utilization?

The balance in your Pay Over Time plan is included in your card's total reported balance, directly impacting your overall credit utilization ratio, a key credit score factor.