Does Dave Affect Your Credit Score?

How Dave Could Affect Your Credit Score

While Dave's standard cash advances don't impact your credit, its optional CreditBuilder service can. This feature is designed to help build your credit history by reporting your on-time payments.

1. Enroll in the Program: The process starts when you opt into Dave's CreditBuilder service. This is a separate feature from the app's standard ExtraCash advances and budgeting tools.
2. Link Recurring Expenses: You connect qualifying recurring payments, such as rent or utility bills, to your Dave spending account. These predictable expenses form the basis of your credit reporting.
3. Dave Reports Your Payments: The service then reports your consistent, on-time payments for these linked expenses to the major credit bureaus, typically Equifax, Experian, and TransUnion.
4. Build Payment History: This regular reporting establishes a positive payment history on your credit file. Since payment history is a primary factor in credit score calculations, this is a crucial step.
5. Monitor Score Changes: Over time, a consistent record of on-time payments reported through Dave can contribute positively to your credit score, demonstrating financial reliability to potential lenders.

How Much Will Dave Affect Your Credit Score?

The Dave app's impact on your credit score isn't straightforward, as its core features operate outside the traditional credit reporting system. Here are the key factors to consider.

• ExtraCash Advances. Dave's cash advances are not reported to the three major credit bureaus. These advances will not directly help build your credit or negatively impact your score if you are late on repayment.
• Optional Credit Building. Dave partners with LevelCredit to report rent and utility payments to the credit bureaus for a fee. This optional service can help you build a positive payment history and improve your credit score over time.

How You Can Avoid Dave Affecting Your Credit Score

Opt-Out of Credit Reporting

Dave's credit-building feature, LevelCredit, is an optional service. You can simply choose not to enroll or can unenroll at any time. This prevents your payment data from being reported to the credit bureaus, ensuring the app has no direct effect on your credit history.

Use Core Features Only

You can use Dave's primary features, like ExtraCash advances and budgeting tools, without ever touching the credit-reporting service. By sticking to these core functions, your activity within the app will not be shared with credit agencies, leaving your score unaffected by its use.

Ways to Improve Your Credit Score

Improving your credit score is an achievable goal that can significantly boost your financial health. With consistent, positive financial habits, most people can see meaningful changes within three to six months.

• Monitor your credit reports regularly. You are entitled to free reports from the major bureaus, which you should check for any inaccuracies that could be hurting your score.
• Establish automatic bill payments. This is a simple way to ensure you never miss a due date, as payment history is the most significant factor in your score.
• Reduce your credit utilization ratio. Aim to keep your balance below 30% of your total credit limit to show lenders you are not over-extended.
• Become an authorized user. Being added to a credit card account with a long, positive history can help build your own credit profile.
• Diversify your credit mix. Lenders like to see that you can responsibly manage different types of credit, such as revolving credit and installment loans.
• Limit hard inquiries. Space out your applications for new credit and use prequalification tools whenever possible to avoid a temporary dip in your score.

The Bottom Line

Dave's cash advances don't directly impact your credit score as they aren't reported to the major bureaus. However, their optional credit-building feature is designed to report payments and potentially improve it.

Frequently Asked Questions

Does using Dave's ExtraCash™ advance affect my credit score?

No, taking an ExtraCash™ advance does not impact your credit score. Dave doesn't perform credit checks for this service or report payments to credit bureaus.

Can Dave help me build my credit history?

Yes, Dave's optional CreditBuilder service can help by reporting on-time rent and utility payments to the major credit bureaus, which can positively influence your score.

Does opening a Dave spending account involve a credit check?

Opening a Dave spending account does not require a hard credit check. Therefore, it will not have any effect on your existing credit score.