Perpay Plus is an online retailer that offers a buy now, pay later model, allowing you to purchase items on credit and make monthly payments. They recently introduced Perpay Plus, a two-dollar monthly subscription that reports your trade line to the credit reporting agencies. While this account may not be suitable for everyone, it can be a valuable tool for building credit. By using Perpay Plus, you can improve your credit score, unlock higher spending limits, and have access to credit alerts and monitoring. It’s important to note that consumer finance accounts should be used cautiously and not in excess, as they can negatively impact your FICO score. If you’re looking to add more primary trade lines to offset negative information or start building credit, Perpay Plus may be worth considering.
Perpay Plus Overview
What is Perpay Plus?
Perpay Plus is a program offered by the online retailer Perpay that allows you to build credit while shopping for a wide variety of household and personal electronics, outdoor equipment, and home goods. It offers a buy now, pay later model, where you can make monthly payments for your purchases instead of paying upfront.
How Does it Work?
To enroll in Perpay Plus, you need to create an account on the Perpay website. Once you have an account, you can start shopping and using the store line of credit to make purchases. The monthly payments you make for your purchases are reported to the credit reporting agencies, allowing you to build credit with every purchase. With responsible use and on-time payments, you can unlock higher spending limits over time.
Benefits of Perpay Plus
One of the main benefits of Perpay Plus is its ability to help you build credit. Every purchase you make and pay off contributes to improving your credit score, with an average increase of 39 points. Additionally, by using Perpay Plus, you can access smaller payments and higher spending limits, which can have a positive impact on your credit utilization. Another advantage is that the account is reported to the credit reporting agencies without a hard inquiry, allowing you to potentially build a higher limit on your personal credit. Perpay Plus also offers credit alerts and credit monitoring services to help you stay on top of your credit.
Building Credit with Perpay Plus
Using Perpay Plus to Build Credit
Perpay Plus provides an opportunity to build credit, particularly for individuals with limited credit history or derogatory items on their credit reports. By making regular, on-time payments for your Perpay purchases, you can establish a positive credit history and improve your credit score over time.
Credit Score Impact
The use of Perpay Plus can have a significant impact on your credit score. As you make on-time payments and demonstrate responsible credit utilization, your score can improve by an average of 39 points. This improvement in your credit score can have far-reaching benefits, such as making it easier to secure loans or obtain credit cards with better terms.
Credit Limit Increase
With responsible use of Perpay Plus, you can unlock higher spending limits over time. As you make on-time payments and build a positive credit history, Perpay may increase your credit limit, allowing you to access even more purchasing power. This can be advantageous for those looking to make larger purchases or manage their expenses more effectively.
Comparing Perpay Plus to Other Credit-Building Options
Bank-Issued Secured Cards and Loans
When it comes to building credit, bank-issued secured cards and loans are often recommended. These traditional credit-building methods involve putting up collateral, such as a cash deposit, to secure a credit card or loan. The advantage of these options is that they not only help you build credit but also establish a banking relationship. However, if you don’t have the funds to put up upfront, Perpay Plus can serve as an alternative to start building credit.
Consumer Finance Accounts
Consumer finance accounts, like Perpay Plus, can be an alternative for individuals who are unable to secure bank-issued secured cards or loans. These accounts allow you to build credit with regular payments, but it’s important to be cautious about having too many consumer finance accounts. Too many accounts of this type can negatively impact your credit score, as credit scoring models differentiate between consumer finance accounts and bank-issued accounts.
Enrolling in Perpay Plus
Creating an Account
To enroll in Perpay Plus, you need to create an account on the Perpay website. The account creation process is straightforward and will require you to provide some personal information. Once your account is created, you can start shopping and using the store line of credit.
Subscribing to Perpay Plus
To access the credit-building benefits of Perpay Plus, you need to subscribe to the program. There is a monthly subscription fee of two dollars to have your trade line reported to the credit reporting agencies. This fee is a minimal cost considering the potential impact it can have on your credit score.
Perpay Plus Fees and Subscription Cost
Monthly Subscription Fee
The monthly subscription fee for Perpay Plus is two dollars. This fee allows your trade line to be reported to the credit reporting agencies, helping you build credit with every purchase. Considering the potential credit score improvement and access to higher spending limits, the two-dollar monthly fee is relatively low-cost.
Total Cost for a Year
To have a primary trade line reported on your credit report for a year through Perpay Plus, you would pay a total of 24 dollars in subscription fees. This investment can be seen as a worthwhile expense for individuals looking to build or improve their credit history.
Who Should Consider Perpay Plus?
Individuals with Limited Credit History
Perpay Plus can be an excellent option for individuals with limited or no credit history. By utilizing the buy now, pay later model and making regular payments, you can establish a positive credit history. Perpay Plus provides an opportunity to build credit even if you don’t have access to traditional credit-building options.
Those with Derogatory Items on Their Credit Report
If you have derogatory items on your credit report, adding more primary trade lines, such as the Perpay Plus account, can help offset the negative impact. By making on-time payments and building a positive payment history, you can balance out the negative information on your credit report.
Caution for Those with Established Credit
Potential Negative Impact on Credit Score
Individuals with established credit may not benefit as much from Perpay Plus. Opening a new consumer finance account can result in a temporary decrease in your credit score due to the new credit inquiry. If you already have a strong credit score, the potential improvement from Perpay Plus may not outweigh the short-term negative impact.
Considerations for Individuals with Multiple Consumer Finance Accounts
If you already have multiple consumer finance accounts on your credit report, adding another one like Perpay Plus may negatively impact your credit score. Credit scoring models view a high number of consumer finance accounts unfavorably, so it’s crucial to manage the number of these accounts you have.
Alternative Credit-Building Options
Secured Accounts
Bank-issued secured cards and loans remain one of the most effective and reliable ways to build credit. By putting up collateral, such as a cash deposit, you can establish credit history and cultivate a banking relationship. If you have the funds available, secured accounts are usually the preferred option.
Other Consumer Finance Accounts
While Perpay Plus is an option for building credit, it’s not the only consumer finance account available. Other retailers and lenders offer similar programs that allow you to build credit through responsible use and regular payments. It’s essential to compare the terms and fees of these accounts before choosing the one that works best for you.
Conclusion
Perpay Plus offers an accessible and straightforward way to build credit while making purchases from the online retailer. By enrolling in Perpay Plus, you can improve your credit score with every purchase, unlock higher spending limits, and access credit alerts and monitoring services. However, it’s important to consider the potential impact on your credit score and evaluate alternative credit-building options if you already have established credit. Perpay Plus can be particularly beneficial for individuals with limited credit history or those looking to offset derogatory items on their credit reports. Remember to use Perpay Plus responsibly, make on-time payments, and manage your credit portfolio effectively to achieve long-term credit success.
