How Using Earnin Could Impact Your Credit Score

While it functions like a loan, using Earnin's core Cash Out feature won't directly impact your credit score, as the company doesn't report payments to the major credit bureaus.

1. Initial Advance Request: You request a cash advance against your earned wages. Earnin does not perform a hard credit check for this service, so there is no immediate effect on your credit score.
2. Automatic Repayment: On your next payday, Earnin automatically deducts the advanced amount, plus any tips, from your linked bank account. This repayment is not reported to credit bureaus.
3. Potential for Insufficient Funds: The primary risk occurs if your bank account has insufficient funds (NSF) when Earnin attempts the withdrawal. The transaction will fail.
4. Bank Fees and Consequences: While Earnin doesn't charge late fees, your bank will likely charge a steep overdraft or NSF fee. This creates an unexpected financial shortfall.
5. The Domino Effect on Credit: This shortfall could cause you to miss payments on other credit obligations, such as credit cards or loans. It is these missed payments, reported by other lenders, that will negatively affect your credit score.

How Much Will EarnIn Affect Your Credit Score?

Using EarnIn won't directly impact your credit score in the way a traditional loan or credit card does. However, there are a few indirect effects to keep in mind when using the service.

• No direct reporting. EarnIn does not report your cash-out history or repayments to the three major credit bureaus. Using the app for its primary service will not directly build or lower your credit score.
• Bank account impact. If EarnIn tries to withdraw funds that aren't in your account, you could face an overdraft fee from your bank. While the fee itself won't hurt your credit, unpaid fees can be sent to collections.

How You Can Avoid Earning Affecting Your Credit Score

Ensure Sufficient Funds

To prevent any negative impact, always ensure your linked bank account has enough funds to cover your payback on payday. An overdraft won't be reported by Earnin, but if your bank sends the unpaid debt to collections, it could seriously harm your credit score.

Monitor Your Credit Score

Take advantage of Earnin’s free credit monitoring feature. While the app doesn't report payments, regularly checking your score helps you stay informed about your financial health. This allows you to catch any unexpected changes or potential issues early on, maintaining control over your credit.

Ways to Improve Your Credit Score

Improving your credit score is entirely possible through consistent, positive financial behaviors. Most people can see meaningful changes within three to six months by following proven strategies.

• Set up automatic payments to ensure you never miss a due date, as on-time payments are the most significant factor in your FICO® score.
• Reduce your credit utilization ratio by keeping balances below 30% of your available credit, either by paying down debt or requesting a credit limit increase.
• Regularly monitor your credit reports from all three major bureaus—Experian, TransUnion, and Equifax—to identify and dispute any inaccuracies.
• Become an authorized user on a credit card account held by someone with a strong payment history to benefit from their positive account activity.
• Limit how often you apply for new credit to minimize hard inquiries, which can temporarily lower your score.
• Maintain a healthy mix of different credit types, such as revolving credit and installment loans, to show lenders you can manage various forms of debt.

The Bottom Line

Earnin does not report your activity to the major credit bureaus, so using the app will not directly help or hurt your credit score. However, ensure you have sufficient funds for repayment.

Frequently Asked Questions

Does Earnin report to credit bureaus?

No, Earnin does not report your cash advance activity to the three major credit bureaus. This means using the app won't directly help or hurt your score.

Can using Earnin indirectly affect my credit?

Yes, indirectly. If using Earnin helps you avoid late payments on bills or credit cards, it can positively protect your credit score from negative marks.

What happens if I don't repay my Earnin advance?

Earnin won't send you to collections or report non-payment to credit bureaus. However, your access to the app's features, like future advances, will be restricted.