Does Paying Gym Membership Build Credit?

If you’re like many people, you probably have a gym membership to work out, and so you might be wondering does paying for a gym membership build credit? This post provides you with everything you need to know about how a gym membership affects your credit score.

Does Paying For a Gym Membership Build Credit?

Paying for a gym member does not build credit because your account status is not reported to the credit reporting bureaus. Therefore, making all of your payments on time will not improve your credit score. Also, missed or late gym membership payments are not reported to the credit reporting bureaus, so they will not directly affect your credit score.

That said, being seriously delinquent on your gym payments can indirectly cause damage to your credit score. For example, if you miss several gym payments, your gym may task a collection agency with collecting the outstanding amount due on your account.

The collection agency may cause significant damage to your credit by adding a collection account to your credit report.

A single collection account can cause your credit score to drop by 100 or more points. The higher your credit score, the bigger the drop will be.

If a collection account is added to your credit report, it will remain on your credit report for 7 years. After the 7 year period, the collection account will automatically be removed from your credit report.

Paying a collection account will not remove it from your credit report. In fact, a paid and unpaid collection account have the same negative effect on your credit score. So, make you gym membership payments to avoid having a collection account added to your credit report.

So, although gym membership payments are not like credit cards where missing a single payment can cause damage to your credit. But, if you’re seriously delinquent and your account gets sent to collections, the collection agency can cause damage to your credit by adding a collection account to your credit report.

Why Does Paying For a Gym Membership Build Credit?

Paying for a gym membership does not build credit because most, if not all, gyms don’t report your payments to the credit reporting bureaus. Since your account status is not reported to the credit bureaus, the information does not appear on your credit report. Therefore, it has no impact on your credit score.

Does Making Your Gym Membership Payment Late Affect Your Credit Score?

No, making your gym membership payment late will not affect your credit score because your account status is not reported to the credit reporting bureaus. Therefore, late payments are not reported to the credit reporting bureaus. That said, if your account is seriously delinquent, you could indirectly cause damage to your credit. This is so because if you’re seriously delinquent, your gym could send your account to collections to recover some of the unpaid membership fees. In the process of collecting the unpaid gym dues, a collection agency can add a collection account to your credit report. A collection account can significantly lower your credit score. So, if you’re seriously delinquent on your gym membership, you should consider paying any outstanding dues to avoid having your account sent to collections and a collection account added to your credit report.

What Damage Can a Collection Account Cause To Your Credit?

A collection account is a negative item that can be added to your credit report. A single collection account can lower your credit score by 100 or more points. The higher your credit score, the bigger the drop will be.

Once a collection account is added to your credit report, it will remain on it for 7 years from the date you first missed your gym membership payment. After the 7 year period, the collection account will automatically be removed from your credit report.

If you have a collection account on your credit report, not only will the collection account lower your credit score, but it will also make it more difficult to borrow money especially if the collection account remains unpaid.

Lenders don’t like to see that you have an unpaid collection account on your credit report, so they may require you to pay it off or they may deny you credit.

So, it’s best to avoid having your gym account from being sent to collections. So, if a collection account appears on your credit report, you should consider paying it off if you have the funds to do so.

That said, paid and unpaid collections accounts have the same effect on your credit score. So, paying a collection account will not reduce its impact on your credit score. Therefore, it’s best to pay your gym membership on time to avoid having your account sent to collections and a collection account being added to your credit report.

Can You Remove a Collection Account From Your Credit Report?

You can only remove a collection account from your credit report if the collection account contains wrong information or was added to your credit report by error. Removing a valid collection account from your credit report is not possible.

That said, if a collection account has been wrongfully added to your credit report, you can file a dispute with the credit reporting bureau showing the collection account to have it removed from your credit report.

After you dispute a collection account, the credit reporting bureau will conduct an investigation to determine whether the collection account is valid. If the investigation reveals that there is an error in the collection account reported, it will remove it from your credit report.

However, if the investigation reveals that the account is valid and no errors appear in the information being reported, the collection account will remain on your credit report for 7 years from the date you missed your first payment. After the 7 year period, the collection account will automatically be removed from your credit report.

So, to avoid having a collection account being added to your credit report in the first place, you should make sure to pay off any outstanding membership dues before your account is sent to collections.

Frequently Asked Questions (FAQs)

1. Does paying gym membership affect your credit score?

No, paying for a gym membership does not affect your credit score because your payments or lack of payments are not reported to the credit reporting bureaus.

2. Can a gym membership ruin your credit score?

A gym membership can ruin your credit score in the event that you fail to pay your gym membership fee, causing your gym to transfer the outstanding amount due to a collection agency. In attempting to collect the outstanding debt from you, the collection agency may place a collection account on your credit report, causing significant damage to your credit.

3. Can cancelling a gym membership affect your credit score?

No, cancelling a gym membership has no effect on your credit score. That said, make sure to completely pay off your account to ensure that you owe nothing to the gym. This prevents an outstanding amount that’s due from being reported to collections.

4. Does unpaid gym membership affect your credit score?

An unpaid gym membership could affect your credit score in the event that you’re extremely delinquent and your account is sent to collection. A collection agency can lower your credit score by adding a collection account to your credit report.