Apple Pay Will Now Look At Customer History To Determine Creditworthiness

Apple’s upcoming Buy Now, Pay Later (BNPL) service, known simply as “Apple Pay Later,” is currently in beta testing before its public launch, but internal documents that were leaked show that Apple may consider multiple factors for who can utilize the service, including their customer history with the company.

What is Apple Pay Later?

Apple’s “Pay Later” service will work similarly to other BNPL options currently on the market. Approved customers will be able to finance purchases with four installments paid over six weeks. This kind of service is particularly helpful for customers who need to make a large purchase quickly but don’t have the cash on hand.

How will they decide which customers can use Apple Pay Later?

The criteria have not yet been officially released, but many factors could be used to determine creditworthiness. Most BNPL providers use the same stats as traditional lenders and will take into account previous spending habits, along with your history of paying back debt (which is why your payment history affects your credit score more than any other metric) and debt-to-income ratio.

However, Apple has dozens of other metrics exclusive to its ecosystem that many other lenders do not. Sources reported to Bloomberg that Apple would also consider a customer’s history with Apple-specific products and services to determine whether they’ll be a suitable candidate for a short-term loan. This history could include the following:

• Purchases made at Apple retail stores
• App store purchases
• Which Apple devices they own
• Apple Cash peer-to-peer payments

Interestingly, purchases made using Apple Pay will not be taken into account as Apple says they “[don’t] retain any transaction information that can be tied back to you— your transactions stay between you, the merchant or developer, and your bank or card issuer.”

What if I don’t have a history with Apple?

As there are yet to be any specific criteria released by Apple, it’s hard to say whether or not potential Apple Pay Later users will be approved without a previous customer relationship. However, if you don’t have a history with Apple, you may still be approved if you have a strong enough credit score.

Ways to boost your credit score

If you think Apple Pay Later will be a feature you want to use, you should start boosting your credit score now to make you a more attractive candidate. Here are a few things you can do:

• Ensure all bills are paid on-time
• Keep your credit utilization below 30% of the total available credit
• Stay current on all your credit reports and ensure all info is correct

The bottom line

Apple’s upcoming BNPL service may be a convenient way to cover expenses, but it looks like it may not be available to everyone outside the Apple ecosystem when it goes live. However, that doesn’t mean you still can’t get approved if you have a strong enough credit history. Keeping on top of your credit may make it easier for you to be approved, but there’s no downside to consistently improving your credit score now to help you should you need to borrow money later on.