Does Care Credit Affect Your Credit Score?

How Does CareCredit Credit Card Work?

Sometimes we have to see a doctor or finish dental procedures, but we lack the money to pay for it at that specific moment; this is where CareCredit helps. CareCredit is a credit card that allows a customer to cover pet and out-of-pocket medical expenses. But before you apply for CareCredit or any other medical credit card, you might wonder: can use this kind of credit damage my credit?

What is CareCredit?

CareCredit is a credit card from Synchrony Bank that allows consumers to manage the cost of medical procedures and services through revolving credit or installments. CareCredit can be used at more than 200,000 enrolled health care providers and veterinary hospitals across the United States for expenses like.

Crowning, implanting, and orthodontic treatment.
Dental care – braces, retainers, implants, root canal, fillings
Veterinary fees
Cosmetic and plastic surgery can be defined as the enhancement of the physical appearance of body parts by using various instruments and tools.
Hearing aids
Fertility treatments
Bariatric surgery
Chiropractic care
Primary doctor out-of-pocket expenses

CareCredit also provides easy monthly payment plans at zero percent interest for 6, 12, 18, or 24 months based on the amount that is being financed. There are also longer-term options for payment which attract a relatively lower rate of interest.

Does CARECREDIT do credit checks?

Yes. As CareCredit provides consumers with a line of credit or payment plans, Synchrony Bank will pull a soft credit check when you apply for an account. Soft inquiries permit lenders to check your credit report and score to determine your qualifications and the interest rate to offer to you without influencing your score in any way.

If approved and you employ your new CareCredit card, the account is filed to the credit bureau each month like any other credit card. Synchrony Bank is your credit limit payment and balance, payment due, and whether you’ve paid on time, late, or missed payment.

How CareCredit can benefit or be detrimental to your credit score

CareCredit can either do you a favor by improving your credit rating or act against you by reducing your credit score depending on how you approach this new type of credit.

Here are some of the ways responsible use of CareCredit can benefit your credit.

Type of credit – CareCredit may open an installment loan or a revolving credit account. Credit scoring models like to see borrowers prove their ability to handle other types of credit responsibly.
A low credit utilization ratio – Having small balances compared to your credit limits is wise and can improve your scores.
Timely payments – Paying at least the minimum amount of the statement balance each month is key to having a good payment history, which is the single biggest factor affecting credit scores.

However, here are some things to watch out for to avoid CareCredit harming your credit score.

High usage ratios – Charging up to your CareCredit card limit or having balances above 30% of the credit limit decreases credit scores. It should not exceed 30% of the limit.
Late payments – Late payments not only attract charges and penalty APRs, it also negatively impact your payment history reported by credit reporting companies. Some things that should be done include; Always paying your bills on time and using autopay to avoid any problems.
New credit – Applying for credit to be granted and used in the shortest time can cause your scores to drop marginally at least for a while. Open only the accounts that you wish to use.

How to Apply for CareCredit Without Damaging Your Credit Score

If the CareCredit card is managed properly, meaning that the payments are made on time and the credit limits are not inflated, this can be beneficial to the credit health. Here are a few tips for avoiding credit score damage when financing medical expenses with CareCredit.

Don’t charge more than you can afford to repay during the introductory 0% APR period or within a reasonable term that you can easily handle.
Pay your Synchrony Bank credit card through automatic payment to avoid missing payment due dates, and register for account alerts too.
It is recommended to pay more than the minimum where possible to pay the balances down quickly.
Use a subcategory of the budget strategy to pay off CareCredit each month before charging other miscellaneous expenses on other credit cards.
If one does not have any upcoming medical bills, it would be wise to cancel the card once you have paid the outstanding balance.

The Bottom Line

The acquisition of a CareCredit account and its utilization is credit-liberating but depends on your management of the account since it can either improve or be detrimental to your credit situation. Credit cards should be used wisely, to avoid late payments, and ensure account balances are kept as low as possible. With good credit management, companies like CareCredit and other medical payment plans can help with costly procedures and treatments that your wallet cannot afford without harming your credit score.

Ready to boost your credit score? Call +1 888-804-0104 now for the best credit repair services near you! Our expert team is here to help you achieve financial freedom and improve your credit. Don't wait—get started today!