Zebit, FlexShopper,and eClubUSA are companies that offer alternative financing options, specifically targeting consumers with limited or no credit history. These companies aim to help individuals build credit by reporting their payment activities to credit bureaus, such as Equifax, Experian, and TransUnion.
Here’s how these companies may help build credit:
1. Reporting to Credit Bureaus: When you sign up for a financing plan or make purchases through Zebit or FlexShopper, they may report your payment activities to the major credit bureaus. Timely payments on your installment plans or leases can positively impact your credit score over time.
2. Alternative Credit Assessment: Unlike traditional lenders who primarily rely on credit scores to evaluate creditworthiness, Zebit, FlexShopper, and eClubUSA may consider other factors such as income, employment history, and payment behavior. This approach allows individuals with limited credit histories to have access to financing opportunities.
3. No Credit Check or Soft Credit Check: Some users may appreciate that these companies generally do not perform hard credit inquiries when approving financing. Instead, they may use a soft credit check or rely on other factors, reducing the risk of negatively impacting your credit score when applying for financing.
It’s important to note that while Zebit and FlexShopper may help individuals build credit, there are also potential drawbacks and considerations:
1. High-Interest Rates: These alternative financing options may come with high-interest rates, making the overall cost of the product or service significantly more expensive. Always carefully review the terms and conditions before agreeing to any financing.
2. Late Fees and Penalties: Missing payments or defaulting on your financing agreement can have adverse effects on your credit score. It’s essential to make payments on time and stay within your budget to avoid late fees and penalties.
3. Limited Impact: While reporting positive payment activities can help build credit, the impact on your credit score might be limited compared to other credit-building strategies like using credit cards responsibly or establishing traditional credit lines.
If you’re considering using Zebit, FlexShopper, or similar services to build credit, it’s essential to research their terms, fees, and customer reviews thoroughly. Additionally, consider alternative credit-building methods, such as secured credit cards, credit builder loans, or becoming an authorized user on someone else’s credit card, to complement your credit-building efforts. Always exercise financial responsibility and ensure that you can afford any financing option you choose.