What Payment Method Is Best To Improve / Not Reduce Credit Score

smevs

Hi all

My son has recently finished University and is working hard in a summer job while applying for something more permanent. He has saved enough to make quite a large purchase of a new guitar, around £1000, but I just wondered if which payment method might be best and whether any types of payment might improve or harm his credit score. 

Would he be better of making a one-off cash payment for the guitar, or he has mentioned an offer with 3 months interest free credit with Klarna thinking the money is better of in his account rather than theirs, and the other option maybe to get a credit card and then pay that off straight away.

Are there any positives and/or negatives in any of these options, espeically thnking about his credit score and improving it for the time he may want move out.

Thanks in advance for your help and advice.

MorningcoffeeIV

None. He doesn't have a credit score.

What he does have is credit history which keeps a record of how he manages credit. Cash payments don't appear on credit files.

If he can get a credit card, then he should use that for his regular spend, not just the guitar, and repay in full each month. 

sourcrates

Only the credit card option and the “klarna pay in 3” would appear on his credit report.

Obviously paying on time will be recorded as such, as would paying late.

The credit score thing is a bit of a sideshow gimmick in this country, the number you see is not seen by anyone else, nor is it used in lending decisions.

It’s a way to generate income for the CRA’s mainly, so it’s in their interest to make you think it’s relevant, when really it isn’t.

I would say allow the lad to enjoy his new purchase and not worry too much what method of payment is best.