The length of your credit history is about 15 percent of your credit score. Financing means a new account is opened for the amount of your purchase, which, in turn lessens the average age of your credit file. These inquiries stay on your credit report for up to two years and can hurt your score during the first 12 months if you're not careful. More harm is done if you're requesting new credit several times in a short period of time. Financing isn't just a payment plan given out freely you're applying for a new line of credit, which means a hard credit inquiry by a retailer can lower your credit score. Low payments are attractive, but zero interest is stagnant debt that can drag down your score if you let it sit over 12 months. Thirty percent of your credit score is based on your utilization ratio. The store maxes out the credit limit, which ramps up your credit utilization. Zero interest can reflect poorly on a credit score: Financing through a retailer means a store credit card is opened in your name for the exact amount of the purchase.Financing is risky missing a payment can result in a penalty and high interest rates.Device upgrades are sometimes included in financing plans.Many retailers offer zero-interest rates, rewards, flexible payment structures and other perks. It’s not necessary to rely on bank loans or traditional credit card services.You don't have to drop a lump sum to get your hands on a pricey laptop.Here's a list of pros and cons that come with financing a laptop, as well as the financing services provided by large retailers. However, when it comes to financing, there's always a catch.
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