Should I go with Affirm?

[Toastmaster]

Hi folks!  Long story short, my wife and I will be applying for a mortgage in the next 3-4 months.

We have an opportunity to get new cell phones through Affirm at 0% interest.  Apparently Affirm reports monthly to credit reports as a loan. (Non revolving)

Since the financing is just for phones, should I go ahead and get them?  Or should I wait until we get the mortgage, to be on the safe side?

Thanks for your help!

[ntx]

Hi Toastmaster and welcome!

I can't speak directly to it, but I've seen advice from others many times on these forums to not create any new debt before closing on a mortgage.

As to Affirm, I believe they report as a consumer finance account, which if true is all the more reason to avoid them if possible:

https://ficoforums.myfico.com/t5/Credit-Cards/Affirm-0-offer-should-I-take-it/td-p/5310801#:~:text=I....

NTX 

[Anonymous]

Generally, it is highly advised to avoid any new lines of credit or hard inquiries on your credit report for 6 months to 1 year before applying for a mortgage.

I can confirm that Affirm will 100% report to the CRA (Experian) and does in fact show up as a installment loan.  It is considered the equivalent of a payday loan and appears to indicate impulse purchases (from what I've read in research). 

Affirm is quick to report to the bureaus but slow to report when the loan is paid off and closed.  

If it is an option, I would suggest to look at the wireless carrier's installment options (such as ATT, Verizon, etc.) as those are internal credit lines specific to the carrier and do not show up on the CRAs.  These installments are also interest free.

[JVille]

DON'T DO IT.... The answer is No! Not if you are this close to applying for a mortgage. It will effect your Morgage Score and not in a good way. 

[Toastmaster]

Thank you EVERYONE for your help!

[Anonymous]

It does affect your debt/ratio as it's a loan and they will be taking your payment as part of that so I would check with your broke/lender first before making any financial changes. 

[Anonymous]

All true - it reports as a consumer finance loan.

One thing to note is that it only reports on Experian.

I wouldn't mess with anything before you close.

[Anonymous]

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@Anonymous wrote:

All true - it reports as a consumer finance loan.

One thing to note is that it only reports on Experian.

I wouldn't mess with anything before you close.

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Thanks for clarifying.

I've edited my post for accuracy.  I should know better as I've used Affirm quite a bit in the past before I learned more about how credit works.  For some odd reason, I always thought I saw them on all three bureaus but I just double checked and it is only showing up on Experian.

[CreditFun]

If you need a new phone, get a cheap one for cash and splurge after the closing.