Item: Affirm Terms of Service
Rating: 58
Author: Terms.Law Editorial Team

⚠ Key Concerns

Affirm reports all loans to credit bureaus (Experian, TransUnion, Equifax), which can impact your credit score. Unlike some BNPL competitors, Affirm's longer-term financing options can carry APRs up to 30% or higher, and missed payments have no grace period.

Score Breakdown by Category

How Affirm's terms rate across my evaluation categories.

💰 Fee Transparency (30%) 50/100

Why this score: Affirm shows APR upfront before checkout, which is more transparent than some competitors. However, APRs range from 0% to 30%+ depending on creditworthiness and merchant. "Pay in 4" is interest-free but longer terms carry significant interest.

Industry comparison: Klarna: 35/100 (hidden fees, soft/hard pull confusion) | Afterpay: 40/100 (late fees unclear) | Sezzle: 30/100 (reschedule fees hidden) | Category avg: 39/100

📊 Credit Reporting Practices (25%) 35/100

Why this score: Affirm reports all loans to all three major credit bureaus. While this can help build credit with on-time payments, late payments significantly damage credit scores. Many consumers don't realize a $50 purchase could affect their credit.

Industry comparison: Klarna: 38/100 (selective reporting) | Afterpay: 40/100 (only reports delinquencies) | Sezzle: 30/100 (opt-in credit building, reports all) | Category avg: 36/100

⚖ Dispute Resolution (20%) 45/100

Why this score: Affirm requires mandatory arbitration with class action waiver. Return disputes can be complex since you owe Affirm, not the merchant. Refund timing depends on merchant cooperation.

Industry comparison: Klarna: 35/100 (opaque dispute process) | Afterpay: 42/100 (merchant-dependent) | Sezzle: 32/100 (limited options) | Category avg: 39/100

🔒 Collection Practices (15%) 40/100

Why this score: Affirm reserves the right to pursue collections and charge late fees. Accounts in default may be sent to third-party collection agencies. However, Affirm has stated it doesn't charge late fees on "Pay in 4" products.

Industry comparison: Klarna: 32/100 (aggressive collections) | Afterpay: 38/100 ($8 late fees, collections) | Sezzle: 28/100 (collections for small amounts) | Category avg: 35/100

👁 Data Privacy (10%) 42/100

Why this score: Affirm collects extensive financial data for underwriting. Transaction data is shared with merchants and partners. Marketing communications can be persistent without clear opt-out.

Industry comparison: Klarna: 30/100 (aggressive marketing) | Afterpay: 38/100 (data sharing) | Sezzle: 35/100 (partner data sharing) | Category avg: 36/100

Compare With Other BNPL Services

⚠ Key Clauses to Watch

These provisions in Affirm's terms create the most risk for consumers.

Credit Bureau Reporting

High Risk

Every Affirm loan is reported to Experian, TransUnion, and Equifax. Late payments can significantly damage your credit score, even for small purchases.

"We report information about your account to credit bureaus. Late payments, missed payments, or other defaults on your account may be reflected in your credit report." Affirm Terms of Service

APR Up to 30%+

High Risk

While "Pay in 4" is interest-free, longer-term financing can carry APRs of 0-30% or higher based on your credit profile. The rate you see at checkout depends on Affirm's real-time assessment.

"Annual Percentage Rate (APR) ranges from 0% to 30%... Rates are determined by Affirm based on your credit profile and other factors at the time of checkout." Affirm Loan Terms

No Grace Period

High Risk

Missed payments are immediately considered late with no grace period. This can trigger credit reporting and potential late fees on interest-bearing loans.

"Payment is due on the scheduled due date. If your payment method fails, your payment may be considered late immediately." Affirm Payment Terms

Mandatory Arbitration

High Risk

Disputes must be resolved through binding arbitration. Class action lawsuits are waived, limiting your ability to join collective legal action against Affirm.

"Any dispute arising out of or relating to this Agreement shall be resolved by binding arbitration... You agree to waive any right to participate in a class action lawsuit." Affirm Arbitration Agreement

Return Complications

Medium Risk

When you return an item, you still owe Affirm until the merchant processes the refund. If the merchant delays or disputes the return, you're caught in the middle.

"You are responsible for your loan payments until any refund from the merchant has been applied to your account. Refund timing depends on the merchant." Affirm Return Policy

Automatic Payment Authorization

Medium Risk

Affirm requires authorization to automatically debit your payment method. Failed auto-payments can cascade into overdraft fees from your bank.

"By providing a payment method, you authorize us to automatically charge that payment method for all scheduled payments." Affirm Payment Authorization

Analysis

"Affirm positions itself as the 'transparent' BNPL option, and to their credit, they do show APR upfront. However, transparency doesn't equal fairness. The fact that every purchase - even a $50 pair of shoes - gets reported to all three credit bureaus is significant. Many consumers use BNPL thinking it's separate from their credit profile.

The credit reporting is a double-edged sword. On-time payments can help build credit, but one missed payment on a small purchase can damage your score for years. Unlike credit cards with grace periods, Affirm's immediate late reporting gives consumers no buffer.

My recommendation: if you use Affirm, treat it like a serious financial commitment. Set up payment reminders, keep your linked payment method funded, and understand that this affects your credit just like a traditional loan would."

Affirm Terms of Service Review

⚠ Key Concerns

Score Breakdown by Category

Compare With Other BNPL Services

⚠ BNPL Debt Issues?

⚠ Key Clauses to Watch

Credit Bureau Reporting

APR Up to 30%+

No Grace Period

Mandatory Arbitration

Return Complications

Automatic Payment Authorization

Analysis

Need Help With Affirm?

Schedule a Consultation

Affirm Terms of Service Review

⚠ Key Concerns

Score Breakdown by Category

Compare With Other BNPL Services

⚠ BNPL Debt Issues?

Related Resources

⚠ Key Clauses to Watch

Credit Bureau Reporting

APR Up to 30%+

No Grace Period

Mandatory Arbitration

Return Complications

Automatic Payment Authorization

Analysis

Need Help With Affirm?

Schedule a Consultation