How Coinbase Could Affect Your Credit Score

While simply buying and selling crypto on Coinbase won't touch your credit score, using certain platform features like lending products or a potential future credit card could have a direct impact.

1. Standard Account Activity: Your regular trading and holding of cryptocurrencies on Coinbase are not reported to credit bureaus. These activities function more like brokerage investments and do not influence your credit history.
2. Engaging with Credit Products: The situation changes if you use a Coinbase feature that involves borrowing. This could include taking out a crypto-backed loan or applying for a future Coinbase credit card product.
3. The Hard Inquiry: Applying for such a credit product typically requires a credit check. This results in a hard inquiry on your credit report, which can cause a small, temporary dip in your score.
4. Ongoing Account Reporting: If approved, your activity on that credit line—including your payment history, balance, and credit utilization—is regularly reported to the major credit bureaus, just like a traditional bank loan or credit card.
5. Building or Harming Your Credit: Consistent, on-time payments and low balances can help build a positive credit history. Conversely, late payments or high utilization on a Coinbase credit product will negatively affect your score.

How Much Will Coinbase Affect Your Credit Score?

While simply buying and selling crypto on Coinbase won't touch your credit score, certain products and activities could have an influence. Here are the key things to consider.

• Coinbase Card. The Coinbase Card is a debit card, not a credit card, so it does not impact your credit score. All spending is deducted directly from your available crypto or cash balance.
• Collateralized Loans. Taking a loan using your crypto as collateral is not typically reported to credit bureaus. However, defaulting could have future financial consequences if reporting standards for these products evolve.
• Standard Trading. Your regular buying, selling, and holding of crypto assets on Coinbase are not reported to credit bureaus. These investment activities are separate from the traditional credit system and do not affect your score.

How You Can Avoid Coinbase Affecting Your Credit Score

Use Alternative Funding Methods

Using a debit card or linking a bank account via ACH for transactions are direct ways to bypass credit systems. These methods draw from your existing funds, so they don't involve borrowing money and therefore have no impact on your credit history or score.

Understand Credit Card Policies

Before using a credit card, check with your issuer. Many treat crypto purchases as cash advances, which come with high fees and immediate interest. This can negatively affect your score if not managed carefully, so being informed helps avoid unexpected credit report impacts.

Pay Balances Promptly

If you must use a credit card, pay off the balance immediately. Large purchases can increase your credit utilization ratio, a key factor in your credit score. Keeping this ratio low by not carrying a balance from Coinbase transactions is crucial for maintaining good credit.

Ways to Improve Your Credit Score

Your credit score plays a crucial role in your financial life, but it isn't set in stone. Whether you want to improve your FICO® Score or VantageScore, there are several proven methods you can use to build a healthier credit profile.

• Monitor your credit reports. Regularly check your reports from all three major bureaus—Experian, TransUnion, and Equifax—to catch and dispute any errors that could be dragging down your score.
• Set up automatic payments. Payment history is the single most important factor in your credit score, so automating payments ensures you never miss a due date.
• Lower your credit utilization ratio. Aim to use less than 30% of your available credit, as a lower ratio signals to lenders that you are a responsible borrower.
• Become an authorized user. Being added to a credit card account with a long history of on-time payments and low utilization can help you build your own credit history.
• Diversify your credit mix. Lenders like to see that you can manage different types of credit, such as credit cards, installment loans, and mortgages.
• Limit hard inquiries. Applying for too much new credit at once can temporarily lower your score, so space out your applications and use prequalification tools when possible.

The Bottom Line

For most users, Coinbase won't affect your credit score. The exception is when using credit products, like a credit card for purchases, which can impact your credit report and score.

Frequently Asked Questions

Does opening a Coinbase account affect my credit score?

No, opening a standard Coinbase account does not require a credit check and therefore has no impact on your credit score. It's treated like opening a brokerage account.

Can using the Coinbase Card impact my credit score?

The Coinbase Card is a debit card, not a credit card. It uses your existing balance, so transactions are not reported to credit bureaus and do not affect your score.

Will taking out a loan on Coinbase affect my credit score?

Coinbase does not report its crypto-backed loans to credit bureaus. Consequently, taking out or repaying these loans will not directly build or harm your credit history.