Does using autopay boost your credit score?

Daily Autopay is a part of what makes Fizz unique. With daily Autopay, your purchases are paid off for you, every day. This means no more big balances that you can’t afford to pay off and no more forgetting to pay your bill in the first place. It’s the best way to stay on top of your finances while you build credit.

But does using daily Autopay do anything to actually boost your score, or is it just a helpful feature? Well, while daily Autopay itself isn’t a factor in your credit score, it can keep your credit utilization low while preventing missed payments. So yes, daily Autopay does help your credit score - even if it does so indirectly.

What is autopay?

Autopay exists all over the world. It’s a feature that enables you to make regular payments at scheduled intervals without having to remember to make said payments. Autopay allows you to pay (usually once per month) for things like credit card bills, utilities, gym memberships, and streaming services.

When it comes to paying off your credit bills, autopay can be helpful if you use it correctly. Major credit card companies encourage overspending, and even if you have autopay enabled, they still encourage you only to pay small, minimum monthly amounts so you owe them extra money in the form of interest. In this scenario, autopay doesn’t necessarily make things better by itself, unless you have it set to pay your entire balance on a regular basis.

The Fizz card, on the other hand, has a daily Autopay feature that pays off your purchases on a daily basis so that you start each day with an updated bank account balance and a $0 balance on your Fizz card. Instead of encouraging overspending and debt, at Fizz we want you to use autopay to boost your credit score and learn better financial habits as you go through college and your young adult life.

What are the benefits of daily Autopay?

Autopay can be a great ally if you understand how the system works. Used properly, autopay can help you boost your credit score by helping you do the following:

Make consistent, on-time payments

When you enable autopay to pay your bills, you won’t miss a payment (provided you have enough money in your bank account to cover the bill). The more payments you make on time, the more you demonstrate your ability to consistently meet your financial obligations. On-time payments boost your credit score more than anything else - by far.

Avoid late payment penalties

If you don’t set up daily Autopay, you run a much higher risk of suffering from late payment penalties than a user who takes advantage of daily Autopay. Simply put, daily Autopay helps you make payments consistently and on time so that you don’t run into any issues with unpaid bills.

Maintain a low credit utilization ratio

Before we explain how autopay can help you maintain a low credit utilization ratio, let’s first define what credit utilization is.

Credit utilization is the amount of your credit line that you’re using. For example, if you have a $100 credit line, you can use up to that line but never more until you’ve paid it back. If you use $75 of your $100 credit line, your credit utilization is very high—75%. You also can’t use more than the remaining $25 until you’ve paid the $75 back.

So what’s the problem with a high credit utilization ratio? Often, a person with a high ratio is someone who isn’t capable of paying off their balance in full every month. Or maybe they’re accruing lots of interest that they’re having a hard time paying back.

Fizz’s daily Autopay feature can help you lower your credit utilization ratio. Even if you consistently use a large portion of your credit line, daily Autopay will keep your purchases paid off every day so that your ratio stays low.

Miss on paying fees

I’ll mention here that you never have to worry about hidden fees or interest with Fizz. You'll only owe a straightforward membership fee, and daily Autopay feature helps you make payments without having to remember to do so. But even if you do happen to miss a payment, you won’t owe any fees. Plus, features like SafeFreeze are here to help you stay on top of your game and build better financial habits.

The bottom line

We get it: you want to build credit without going into debt. That’s why we created the daily Autopay feature for your Fizz card. Once you enable it, you won’t have to worry about manually paying off the purchases you make with your Fizz card. Fizz does it for you so you can build good credit without thinking about it.

Fizz also connects to your existing bank account, so you won’t be able to purchase anything you don’t have the funds for. And you’ll start each day with an accurately updated account so you have real-time knowledge of the money that’s available to you.

If you’re worried about your current credit score, you should know this: we don’t check credit scores when you sign up. We believe in helping you build better credit so you’re in good shape when future lenders want to take a look. Let us help you build good credit so you’re prepared for the future!

*This communication is for informational purposes only and should not be considered financial advice.*