Interest Free Credit

Jaffa_Cake_UK

Hi all,

Can anybody help me understand the impact (if any) of interest-free credit on your credit rating? Does it matter how many companies you have interest-free credit with at any one time? What are the catches with this kind of credit?

Thanks,

Jaffa

no_more_cards_for_me

Define what you mean by interest free ?

Jaffa_Cake_UK

I mean goods with 0% APR e.g. sofas, paid for over time, where the total paid by the end of the period is the same as that when paid in one go at the point of purchase. I'm wondering if every time you apply for/ enter into an interest-free agreement, is this logged in some way and does it matter/ affect your credit rating? I am considering using it for a range of things from a range of places and use disposable income to repay over time, but I do want to be clear about any downsides to doing it.

Many thanks

Tubbss

Hi

Each application will show on your credit file, as will each opened agreement - exactly the same as any other loan / credit agreement. The APR etc is irrelevant as the rate will not show on your credit file.

So, make multiple applications and get multiple searches done on you and this could have be detrimental to your credit file.

Jaffa_Cake_UK

Thanks Tubbss - that's very helpful!

moominmama72

The main catch is that its not really intrest free, the company usually just charges more for the item in the first place

Wutang_2

....you may also be a victim of a killing spree