Klarna’s Impact on Long-term Credit
Even though using Klarna sensibly won’t lower your credit score, it’s crucial to remember that it still counts as credit. Mismanagement can have a long-term impact on your credit history.
Credit reference agencies will receive this information if you fail to make payments or pay them on time. A negative entry could stay on your credit report for up to six years. This could impact your future ability to obtain credit because lenders view you as a higher risk.
Additionally, although Klarna’s “pay in 30 days” and “3 interest-free instalments” options only require a soft credit check, submitting too many credit applications may raise red flags.
Although lenders aren’t aware of these checks, having too many can be a warning sign because it shows a dependence on credit.
Therefore, it’s essential to use Klarna responsibly, even though it can be a convenient way to spread out the cost of purchases. Misuse can negatively impact your credit history over the long term.