Does CareCredit Affect Credit Score and How

CareCredit is a popular financing option for medical and dental procedures, but many people wonder if it affects their credit score. Fortunately, CareCredit reports payments to the three major credit bureaus, which can actually help improve your credit score over time.

CareCredit's payment history is reported as a revolving credit account, just like a credit card. This means that making on-time payments and keeping your balance low can have a positive impact on your credit score.

However, if you miss payments or have a high balance, it can negatively affect your credit score. It's essential to use CareCredit responsibly and pay your balance in full each month to avoid any potential damage to your credit score.

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Care Credit is a specialized financing option that focuses specifically on health and wellness-related costs. It's a healthcare credit card that's only accepted by participating providers, limiting its use to healthcare or wellness-related costs.

A wide array of providers accepts Care Credit, including dentistry, dermatology, eye care, and hearing services.

You can use Care Credit to pay for elective or cosmetic procedures, as long as you're working with a participating provider. This can be a helpful option if you're looking to finance a treatment that's not covered by insurance.

Care Credit can also be used to cover veterinary costs for household pets. This is a convenient way to finance unexpected or emergency vet visits.

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CareCredit has some significant drawbacks that you should be aware of. CareCredit's interest rates can be quite high, especially after the zero-interest promotional period ends, with rates as high as 29.99% as of early March 2024.

The interest rates are also quite steep compared to other no-annual fee credit cards, with an average interest rate of just 24% according to research by Lending Tree. Additionally, the interest rate on CareCredit debt will never drop below 22.98%.

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CareCredit also charges high late payment fees, with a $29 fee for balances under $249.99 and a $39 fee for balances of $250 or more. These fees are among the highest allowed by law, which means you could potentially pay more in late fees than your entire balance.

Here are some key facts about CareCredit's fees and interest rates:

Applying for a CareCredit card can be a bit tricky, and it's essential to understand how your application affects card selection. If you apply online, you'll be considered for the CareCredit Rewards Mastercard first.

The CareCredit Rewards Mastercard is the more desirable option, as it can be used almost anywhere and earns 2 points per $1 spent in the CareCredit network, on eligible health and wellness purchases, and at grocery and pet stores.

However, if you don't qualify for the Rewards Mastercard, you may be offered the baseline CareCredit credit card, which still has a $0 annual fee and offers promotional financing.

You can also apply over the phone, but in that case, you'll only be considered for the baseline CareCredit credit card.

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CareCredit has some significant drawbacks to consider. Higher interest rates after the zero-interest promotional offer are a major con. After the promotional period, the interest rate zooms to Prime +18.99, which as of early March 2024 was as high as 29.99%. That's on the expensive side, especially when you compare it to the average interest rate on other no-annual fee credit cards, which is just 24%.

Late payment fees are another issue. CareCredit charges a fee that depends on your balance, which can be as high as $39 on a balance of $250 or more. That's the highest late fee the law allows, and it's a very bad deal if you have other options.

CareCredit also has limited use. You can only use it with doctors and other medical providers who have contracted with the card. Cash advances are available, but they come with a fee of 4% of the amount advanced, with a $5 minimum.

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Here are some key facts about CareCredit's disadvantages:

Many providers will offer you a discount if you pay with cash up front rather than financing. If you can raise the money from any other source, ask for this cash discount.

CareCredit's credit check is a soft-pull, which means it has no impact on your credit score. This is good news if you're worried about applying.

If you apply for CareCredit and then immediately pay it all off, it could potentially help your utilization ratio. This is because the account will be open and showing a $0 balance, which can improve your credit utilization ratio.

However, if you're declined, it's likely because CareCredit pulled your TransUnion credit report. This is the credit bureau that CareCredit uses for their credit checks.

CareCredit doesn't advertise a specific minimum credit score to qualify, but general advice recommends having a credit score of at least 620 or 640.

CareCredit doesn't advertise a specific minimum credit score to qualify for an account. However, general advice usually recommends having a credit score of at least 620 or 640.

Some people have anecdotally reported being able to open a Care Credit account with scores closer to 600. Care Credit is less stringent when it comes to credit scores than many other lenders.

The prequalification process online allows potential borrowers to enter specific details and get an initial decision in just seconds, all without impacting their credit score. This can give you a good idea of whether you'll be approved for an account.

A prequalification doesn't guarantee approval, but it does give you a solid chance. If you don't get an offer to apply after prequalification, it usually means you didn't meet all of the minimum criteria to open an account on your own.

You may be able to apply with a cosigner and get approved. Care Credit will perform a hard inquiry on your credit report after you apply, which can temporarily impact your credit score.

CareCredit does run a credit check, but it's a "soft-pull" that has no impact on your credit score.

If you apply for CareCredit and then immediately pay it all off, it can actually help your utilization ratio, as long as the account is open.

CareCredit is treated the same as a credit card on your credit report.

Applying for CareCredit has the same impact on your credit report and score as applying for any other credit card.

A hard inquiry on your credit report can temporarily impact your credit score after the fact.

CareCredit doesn't advertise a specific minimum credit score to qualify for an account, but generally recommends having a credit score of at least 620 or 640.

However, some people have reported being able to open a CareCredit account with scores closer to 600.

If you're concerned about your credit score, you can go through the prequalification process online, which doesn't impact your credit score.

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But keep in mind that a prequalification doesn't guarantee approval, and applying for CareCredit will result in a hard inquiry on your credit report.

If you don't get an offer to apply after prequalification, it usually means you didn't meet all of the minimum criteria to open an account on your own.

Here's a quick summary of CareCredit's impact on credit score:

If you're considering CareCredit, it's essential to weigh the pros and cons. CareCredit can be a good option if you can pay off the balance before the promotional period expires, but the regular interest rate that applies afterward can be incredibly high.

CareCredit's regular interest rate can be higher than what you'd find with a normal credit card. If you're not sure you can pay off the balance within the promotional period, it's crucial to explore alternative options.

Some alternatives to CareCredit include personal loans, which have a fixed interest rate and a defined repayment plan. This can give you peace of mind knowing exactly what you'll owe and when you'll have the debt fully paid off.

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Here are some alternative options to consider:

If you're not a good fit for CareCredit, there are other options to consider.

CareCredit's zero-interest period can be a blessing for those who can afford to pay off the entire amount within that time frame.

However, if you can't afford the minimum payment or have other financial options, it's best to explore alternatives.

You can make a personal financing agreement with your provider, which can be a more flexible option.

Personal loans from banks and credit unions, or even friends and family, can also be a viable option.

CareCredit is not the only healthcare credit card available, and there are other options that may offer better interest rates or rewards.

Loans against life insurance can be a tax-free way to cover medical expenses, and the best part is that there's no credit check involved.

Hospitalization or accident indemnity insurance can provide a cash benefit directly to you for medical expenses and lost wages.

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Care coordination services can also help you find the best financing options for your healthcare needs, and may even negotiate lower prices with healthcare providers.

Here are some other review options to consider:

When dealing with medical debt, it's essential to explore alternatives that can help you cover costs without going into debt. You may be able to use a health savings account (HSA) or flexible spending account (FSA) if you have current medical insurance.

These tax-advantaged plans allow you to contribute to a fund that can be used for qualifying healthcare expenses, which might be a better option than paying interest on a debt.

If you're concerned about handling debt before a promotional period ends, personal loans are worth considering. They have a fixed interest rate and a defined repayment plan, giving you a clear understanding of what you'll owe and when you'll be debt-free.

You can use a health savings account (HSA) or flexible spending account (FSA) instead of credit cards or loans. These accounts can help you save for medical expenses and reduce your financial burden.

Here are some alternatives to consider:

Care Credit can be a great option for financing medical expenses, but it's essential to consider a few things before applying. If you can't pay off the balance before the promotional period expires, the regular interest rate can be incredibly high, often above what you'd find with a normal credit card.

You'll need to support a new debt, which can impact your credit score. A hard inquiry can affect your score, even if you don't open the account.

Care Credit's credit check is a soft-pull, which has no impact on your credit score. This can give you a better idea of whether you'll qualify without affecting your credit.

Care Credit's interest-free financing can be a boon, allowing you to spread out payments over time. However, the APR can be high if you don't pay off your balance in full during the promotional period.

Here are some key features of Care Credit:

Applying for a credit card like CareCredit can affect your credit utilization ratio, which is a percentage of your available credit being used.

If you apply for CareCredit and then pay it all off immediately, it might help your utilization ratio, but only if the account remains open.

CareCredit is treated similarly to a traditional credit card on your credit report, which means it can impact your credit score.

Paying off the balance right away can show a positive change in your utilization ratio, but it's essential to remember that the account's open status will continue to influence your credit score.

If you're declined for CareCredit, it's likely because the lender pulled your credit report, which might have included your TransUnion report.

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