Does Purchasing Power Report to Credit Bureaus?

Purchasing Power is an employee benefit allowing individuals to acquire products and services through convenient payroll deductions. It clarifies how this program interacts with an individual’s credit history and reporting.

Understanding the Purchasing Power Program

The Purchasing Power program is a voluntary employee benefit, offering a way to obtain goods and services without traditional credit. Employees can acquire items like electronics, home appliances, or fitness equipment, with payments automatically deducted from their paychecks over a period, often 6 to 12 months. This means the program generally does not involve a traditional credit check or charge interest. Repayment is secured directly through ongoing employment and payroll deductions.

The program offers a convenient payment alternative for employees who may not have immediate cash or prefer not to use credit cards. It provides upfront pricing, ensuring the employee knows the total cost, including any taxes or shipping fees, without hidden charges. This makes it accessible to a broad range of employees, including those who might not qualify for traditional credit or wish to avoid accumulating credit card debt.

Purchasing Power and Credit Bureaus

The Purchasing Power program does not report on-time payments to major consumer credit bureaus like Experian, Equifax, or TransUnion. This is because the program is not designed as a credit-building tool. Its payment process, relying on payroll deductions, differs from typical credit bureau reporting requirements. Credit bureaus require systematic reporting of account balances and payments at fixed intervals, which payroll deductions may not consistently align with.

However, exceptions to this non-reporting policy exist. If an account goes into severe default, especially if an employee leaves their job before fulfilling payment obligations, it might be sent to a collections agency. A collections agency could then report the delinquent debt to credit bureaus. While Purchasing Power works directly with customers to set up alternative payment plans, failure to resolve the debt could lead to negative reporting by the collection entity.

Implications for Your Credit Score

Since on-time payments to Purchasing Power are generally not reported to credit bureaus, using the program will not help build a positive credit history or improve a credit score. On-time repayment of a Purchasing Power agreement will not appear on a credit report, meaning it will not contribute to your credit score’s payment history. This distinguishes it from traditional credit products, where consistent on-time payments can positively influence creditworthiness.

Conversely, the program is generally designed to avoid negative impacts on your credit score. A negative impact typically occurs only in extreme scenarios, such as when an account becomes severely delinquent and is transferred to a collections agency. If a collections agency reports the unpaid debt to credit bureaus, this delinquency could significantly harm an individual’s credit score, potentially affecting their ability to secure future loans or credit. This underscores the importance of fulfilling payment obligations, even if employment status changes.