A hire purchase agreement can affect your credit score in different ways depending on how you act as a borrower.
Your credit score is a three-digit number that represents your current financial situation and your past borrowing behaviour. The higher your score, generally the easier it will be for you to secure a loan.
If you’re approved for HP finance, your credit score could dip slightly afterwards. This is just because a new loan has been added to your credit profile. As soon as you’re actively making your regular monthly repayments, your credit score will usually start to recover. In fact, if you make all your payments on time, your HP agreement could even raise your credit score over time.
By contrast, falling behind on repayments could lower your credit score. The good news is that your credit score is never fixed, so getting your payments back on track and taking other steps to build your score can help offset any damage done.