Do Netflix, Spotify subscription payments impact your credit score? 5 key tips to help you boost your financial profile

How subscription payments affect credit scores is a big question in India right now, with the ever-increasing consumption of digital products. This is a consequence of the ever-rising awareness of credit and debt products and the ease of using credit instruments such as credit cards, personal loans and small loans. Read the following five points to know how timely and consistent subscription payments can affect your creditworthiness.

1. Payment history matters

Your payment history is one of the components of your credit score. It has a value of about 35 per cent and is the most critical component in assessing your creditworthiness. Timely payment of your subscriptions will boost this category; defaults and late payments, on the other hand, will lower your score.

2. Payment of subscription and credit reporting

The vast majority of subscription membership, like Netflix or Spotify, will never impact your credit score. The payment option matters, though. If you pay those membership subscriptions through a credit card, timely payments made consistently can be reported in your account with the credit bureaus and hence enhance and boost your overall credit record.

In case you don’t repay “buy now, pay later” options such as Amazon Pay Later or Ola Postpaid, it has the potential to work against your credit score. Eventually, it all depends on your punctuality and reliability in paying regular instalments on borrowed credit.

3. Utilisation of the auto-pay features

Most of the subscriber-based service providers want their customers to have auto-pay enabled since it helps them avoid any missed payments. This also helps in keeping their payment record clean. If you shut off auto-pay and avoid paying pending dues, it can result in damaging your credit profile and bringing your credit score down. Therefore, you must keep your subscriptions active and under control and pay all the payments on the due date so that you can make the most of the auto-pay feature.

4. Educating consumers

New data reveal that an increasing number of Indian shoppers pay close attention to their credit scores. A recent TransUnion CIBIL report reports 119 million Indians actively checking their CIBIL scores up to March 2024, up 51 per cent year-on-year.

Similarly, CRIF High Mark recently revealed that women’s outstanding loan portfolio grew 18 per cent to ₹36.5 lakh crore in 2024, with their borrower share stable at 24 per cent. Younger women (≤35 years) held the largest share in originations, despite a slight drop to 43.8 per cent from 44.3 per cent in 2022.

This data clearly shows the increasing significance of educating consumers about basic concepts such as credit cards, credit scores and credit profiles. This will help them navigate the complexities of availing loans easily at reasonable interest rates.

5. Creating credit through subscriptions

Simply put, subscription payments do not directly impact credit scores. However, if you use a credit card for subscriptions, timely payments can help build your score and might also help in improving your overall credit health.

Setting up automatic payments ensures consistency and helps maintain a clean payment history. That is why, if possible, ensure that you make subscription payments consistently through your credit cards.

Financial responsibility matters

Subscription charges do not actually impact your credit report directly. But they do add to the overall picture of your financial status. Paying them in a responsible manner is an important factor in preserving and developing your credit report and credit history.

Disclaimer: Mint has a tie-up with fintechs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.