Does Zilch Improve Credit Score

Does Zilch Improve Credit Score

Zilch is one of the fastest-growing Buy Now Pay Later (BNPL) providers in the UK, offering customers the option to split purchases into interest-free payments. As more people turn to BNPL services to manage everyday spending, a common question arises: does Zilch improve your credit score?

The short answer is: Zilch can improve your credit score, but only if you opt in to their credit reporting feature and use the service responsibly. Like any credit product, the way you manage repayments is what determines whether your credit profile benefits or suffers.

In this article, we’ll explore how Zilch works, how it interacts with your credit report, and what steps you can take to ensure it helps — not harms — your financial health.

What Is Zilch

Zilch is a UK-based Buy Now Pay Later platform that allows you to:

• Pay in full at checkout and earn cashback

• Pay in 4 interest-free instalments over six weeks

• Use a virtual Mastercard to shop online or in-store

Unlike some BNPL platforms, Zilch requires an initial soft credit check and identity verification when you sign up. It offers spending limits based on your financial profile and repayment history.

Zilch is regulated by the Financial Conduct Authority (FCA), which means it operates under stricter rules compared to some other providers in the space.

Does Zilch Report to Credit Reference Agencies

Yes, but only if you opt in.

In 2022, Zilch launched its Pay in 1 credit reporting feature, where users can allow Zilch to share repayment data with credit reference agencies such as Experian and Equifax.

If you enable this feature and consistently make your payments on time, your positive behaviour will be recorded on your credit file. This can help:

• Build a payment history

• Improve your credit score over time

• Strengthen your profile for future lending decisions

However, if you miss payments, these can also be reported and may negatively affect your score.

How Zilch Can Improve Your Credit Score

If you’ve opted into Zilch’s credit reporting and use the service carefully, it can help your credit score in the following ways:

1. Builds a history of on-time payments
Payment history is one of the most important factors in credit scoring. Zilch reports your on-time Pay in 1 payments, which can help build or strengthen your credit file.

2. Supports a thin credit profile
If you’re new to credit or have a limited credit history, using Zilch responsibly can help show lenders that you can manage short-term borrowing.

3. Helps demonstrate responsible borrowing
Regular, low-value payments made on time help show that you can manage commitments sensibly without taking on high-risk debt.

When Zilch Can Harm Your Credit Score

Zilch will only hurt your credit score if:

• You opt into credit reporting and miss repayments

• You overextend yourself and struggle to keep up with payments

• You use Zilch frequently in a way that suggests dependency on short-term credit

Missing even one payment can result in a negative entry on your credit report. This may reduce your score and make it harder to get approved for future credit cards, loans or mortgages.

Real-World Example

Ella enabled credit reporting on her Zilch account and used it to buy groceries and small online purchases. She always paid in full by the due date. Within six months, her Equifax score increased by 30 points, and she was later approved for a credit card with a mainstream lender.

In contrast, Jake missed two payments on his Zilch account after opting into reporting. These late payments were recorded on his credit file, and his score dropped, making it more difficult to pass affordability checks for car finance.

Tips for Using Zilch to Build Credit

• Opt into credit reporting only if you’re confident you’ll pay on time

• Use Pay in 1 for everyday purchases you can afford to repay in full

• Set up payment reminders or direct debits to avoid missing a due date

• Don’t rely on BNPL services to cover essential costs

• Monitor your credit file to track changes and correct any errors

You can check your credit report for free using platforms such as Experian, ClearScore or Credit Karma.

Final Thought

Zilch can help improve your credit score, but only if you enable credit reporting and manage your repayments responsibly. Used correctly, it offers a way to build a stronger credit profile — especially for people with limited credit history.

As with any credit tool, the key is to borrow within your means and pay on time. If you’re confident in your ability to do that, Zilch could become a helpful stepping stone toward better financial options in the future.