It seems like every day there is a new ‘pay-later’ service being introduced in the store front windows of your favourite shops. They promise ‘easier,’ ‘more manageable’ repayments – while having the freedom of enjoying your purchase sooner. But how do these enticing schemes affect your borrowing?

It’s become a reoccurring habit for brokers and bankers to question whether or not you, as an applicant have an AfterPay or Zip account. But surely that $1,000 spending limit you’ve only used a handful of times can’t affect you that much, right? Wrong.

These ‘buy now, pay later programs’ don’t need the best credit rating to allow you to spend, but the impact they have on your credit file can ruin your lending ability.

AfterPay, Zip and Humm are often overlooked when you consider your day-to-day living costs. And failure to disclose these costs to your lender can cost you any credibility you had about money management. These direct debits are shown on your bank statements as a regular reminder to the bank that you’re in a bit of debt – no matter how small or large, and this debt is considered an ongoing cost, reducing your lending capabilities.

So, how do you redeem yourself from ‘pay-later’ services? It’s crucial to pay out those pay-later responsibilities at least three to six months before applying for a loan. You have more credibility when the bank can see that there are no repayments to AfterPay coming out of your account anymore. Once these accounts are paid, make the 10-minute phone call to these ‘pay-later’ services to have your account closed.

If you are having financial hardship problems you can book a free appointment to speak to a financial counsellor. Phone the National Debt Helpline on 1800 007 007 (Monday to Friday, 9:30am – 4:30pm). Or visit