Does Cash App Borrow Build Credit [Explained]

Cash App Borrow is one of the recent additions to the arsenal of features offered by Cash App. If you have access to this feature, you can borrow a short-term loan of up to $200 from Cash App which has to be repaid in four weeks, with a 5% flat fee. If you are using the Cash App borrow feature or planning to use it, you may be interested in knowing -Does Cash App Borrow Build your Credit in this guide, we will attempt to answer the question in detail.

While the Cash App Borrow feature is quite convenient for Cash App users, it is not available to all users and there are various factors that can impact your access to Cash App Borrow feature.

Further Cash App Borrow is not a cheap source of funds as you have to shell out a 5% flat interest when repaying in four weeks. This amount adds up to a 60% APY, which is actually on the expensive side.

Also, the maximum amount that you can get with Cash App borrow is $200 and the feature is also not accessible to all.

Cash Advance apps like Dave and Chime Spot Me which offer advances against your paycheck turn out to be a much cheaper option when you compare with Cash App Borrow.

So it is natural to think if is there any other benefit to using this feature apart from the convenience.

For e.g. does the repayments of Cash App borrowing help you build your credit score?

Nowadays there is an increasing awareness of the importance of building your credit score. There are various products introduced by online bank apps that are specifically designed to help you build credit e.g. Chime Credit Builder Card.

Especially when you are on the younger side, you want to be building credit so that the credit score does not come in the way when you have a genuine need for credit.

Does Cash App Borrow Build Credit

As per Cash App Borrow terms, Cash App may report information about your borrow account to credit bureaus. This can also include information like late payments, missed payments, or other defaults in your account.

So while Cash App does not specifically mention reporting on-time repayments of Cash App loans to credit bureaus, which can actually help you build credit. But it is clear that defaults or misses can be reported which can negatively impact your credit score.

But does that mean there is no positive impact on credit that you can expect with the Cash App borrow feature?

The answer is not straightforward. There have been reports by some Cash App Borrow users who have seen a bump in their credit score after using this feature.

It is also an ongoing discussion with Reddit, on whether the cash app has helped the credit score.

However, there are not a lot of people to form a conclusive opinion. And if you have other forms of credit apart from Cash App borrow a loan, that may impact your credit score as well.

Test Cash App Borrow to see if helps build your credit

So it can be a bit of trial and error. It may be worth experimenting with a small loan and repaying before time to see if there is any change in credit score if it is convenient.

If you don’t have any other form of credit apart from Cash App Borrow and you see a rise in your credit score by repaying your Cash App loan, it can be safe to assume that it has helped build your credit.

There is no official word from Cash App on this and it is not marketed as a credit-building product either. So it is definitely not a surefire option.

Other products to help build credit

If you are looking to build credit, there are other products that you can try out apart from Cash App borrow that may help your credit score. Some cards that can help with building credit are listed below:

  • Chime Credit Builder Card
  • Petal® 2 “Cash Back, No Fees” Visa® Credit Card
  • Discover it® Student Cash Back
  • U.S. Bank Cash+® Visa® Secured Card
  • Citi® Secured Mastercard®

Wrap Up

The main USP of the Cash App Borrow Feature is its convenience. The other benefits like the possibility to build credit etc, are not established. Add to that, the Cash App Borrow feature is accessible only to selected users and also at a high-interest rate, so it is not to be looked at as a favorable option when it comes to building your credit.

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I have a passion for finance and technology. On this blog, I share helpful information on products and services that we use in our daily lives and simplify things I learned the hard way.

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