Credit Building > Does Clearpay Build Credit? Here's What You Need to Know

Does Clearpay Build Credit? Here's What You Need to Know

Wollit Team2 minute read · Updated 19th February 2025

If you're using Clearpay for online shopping, you might wonder whether it helps build your credit score. The short answer is no - like most buy now pay later services, Clearpay doesn't report your payment history to credit reference agencies, which means using the service won't improve your credit score.

Understanding How Clearpay Works

Clearpay lets you split purchases into four interest-free installments over six weeks. You'll pay the first installment at checkout, with remaining payments automatically charged every two weeks. While the service is free when you pay on time, late payments incur fees of £6 for orders under £24, and up to £24 for larger purchases.

Impact on Your Credit Score

Clearpay's effect on your credit rating varies depending on how you use it:

When you apply, Clearpay performs a soft credit check that won't affect your credit score. Your regular payments won't appear on your credit report since Clearpay doesn't share this information with credit reference agencies.

However, if you default on payments, Clearpay might pass your debt to a collection agency. At this point, the default could be reported to credit agencies, potentially damaging your credit score.

The Risks of Using Clearpay

While Clearpay offers convenient payment splitting, it's important to understand the potential drawbacks. Missing payments not only leads to fees but could also result in account suspension. Additionally, having multiple buy now, pay later payments can make it difficult to track your total financial commitments.

Since Clearpay operates outside Financial Conduct Authority regulation, you won't receive the same protections as with traditional credit products. This means less security if something goes wrong with your purchase or payment schedule.

Better Ways to Build Credit

If your goal is to improve your credit score, you'll need to look beyond buy now, pay later services. Traditional credit products like credit cards report your payment history to credit reference agencies, helping build your credit profile when managed responsibly.

However, credit cards come with their own risks, including high interest rates and the temptation to overspend. A dedicated credit-building service might offer a more structured approach to improving your credit score.

A More Focused Approach

Wollit's Credit Builder provides a straightforward way to build your credit score through regular, manageable payments that are reported to all major credit reference agencies. Unlike buy now, pay later services, which don't contribute to credit building, Wollit focuses specifically on helping you establish a stronger credit profile.

Making the Right Choice

When deciding how to manage your finances and build credit, consider your primary goals. If you need flexible payments for shopping, Clearpay might work for you - just remember it won't help build your credit score. However, if improving your credit score is your priority, consider a dedicated credit-building service that reports to credit reference agencies.

Building good credit takes time and consistency. Choose tools that align with your financial goals and help you maintain responsible credit behaviour over time.