Buy Now Pay Later (BNPL) is a debt, so you need to refer to or consider it as such. However, one of the many benefits borrowers enjoy about this type of loan is changing; the loan activities will begin to show on your credit reports and soon will be affecting your credit ratings.
Meanwhile, it's important to note that if your BNPL creditor reports defaulting activities to a credit bureau, it'll definitely affect your credit scores. This is why it's very crucial to understand all the terms and conditions of the particular BNPL credit before you apply.
As BNPL activities such as repayment history, defaulting records and more begin to show on your credit report, other lenders will have access to this report and can use it to determine your creditworthiness because they've already known your repayment capabilities.
What is BNPL
Buy Now Pay Later (BNPL) is a short-term loan creditors grant to both physical and online shoppers for the goods and services purchased and allows them to pay back instalmentally with small interest added.
The BNPL credit system has seen a surge over the past few years, with many merchants, stores, and business owners adopting it as a model of payments to their customers.
Businesses willing to offer BNPL services to their customers will need to partner with a BNPL platform for connections either through an API or integration.
Examples of popular BNPL providers are Klarna, Affirm, and Afterpay. These platforms all offer short-term financing that lets consumers purchase items immediately but pay for them over time, usually in instalments.
You can see it integrated at online checkouts or in stores for items like clothing, electronics, or furniture. The benefits of BNPL services are that they usually have very low interest rates, they get approved quickly, they help manage cash flow for bigger purchases, and they don't affect your credit scores.
BNPL policy is changing
The Buy Now Pay Later policy is changing towards the fact that the credit doesn't directly affect your credit rating. This policy has been reformed: FICO announced on June 25, 2025, that it'll include BNPL loans in its credit score calculations.
Quick Hints: FICO is a company that creates and calculates most of Americans’ credit scores, called FICO Scores. Lenders source credit reports from FICO to decide if someone is a good credit risk. The scores range from 300 to 850 — the higher, the better. FICO doesn’t collect credit data itself. Instead, it uses data from the three major credit bureaus — Experian, Equifax, and TransUnion — to calculate your score.
About 4 in 10 Americans who use BNPL services say one of the main advantages they enjoyed is that it doesn’t affect their credit score. Now that the policy is changing, what happens next?
Launch of New Credit Scoring Models
Starting this fall, FICO's new credit scoring models—FICO Score 10 BNPL and FICO Score 10 T BNPL—will incorporate BNPL loan data from the three (3) major credit bureaus—Experian, Equifax, and TransUnion. This means BNPL payment history, reported by some providers to these three (3) major credit bureaus, will directly affect your credit scores.
Recently we've confirmed some facts:
- Some BNPL providers, like Affirm, already report BNPL loan activity to Experian, including consumers' payment history and loan status. Although Experian has a separate BNPL bureau to track these loans without immediately affecting traditional credit scores, this data may now feed into FICO’s new models.
- Equifax allows BNPL providers to report loans as either revolving or instalment accounts, and providers can choose whether these loans impact core credit scores. This flexibility means BNPL data may or may not influence Equifax-based FICO scores, depending on the provider’s reporting choice.
- TransUnion tags and filters BNPL data to ensure it doesn’t immediately affect traditional credit scores until scoring models are fully adapted. They plan to report BNPL data bi-weekly due to the short-term nature of these loans to reflect timely payments faster.
Meanwhile, it's important to note that while not all BNPL platforms are currently reporting to credit bureaus, they'll soon start, as this new policy is effective. This will give them more options to recover their money back. So, timely payments could improve scores for borrowers, while missed payments or excessive BNPL use may lower them.
How Lenders Use BNPL Data
Lender Visibility
Lenders will access two FICO scores—one including BNPL data and one without—allowing them to choose how to assess creditworthiness. This gives a fuller picture of a borrower’s debt, addressing “phantom debt” concerns where BNPL loans were previously invisible.
Risk Assessment
Lenders may view heavy BNPL use, especially with missed payments, as risky behaviour, similar to payday loans, potentially leading to stricter lending decisions. Conversely, responsible BNPL use could improve loan approval odds for those with thin credit files.
Adoption Pace
Lenders’ adoption of FICO’s BNPL-inclusive scores may be slow, as the credit industry adapts gradually. Not all lenders will immediately use these scores, and some may rely on traditional scores due to inconsistent BNPL reporting across bureaus.
Final Note
FICO’s recent move to include Buy Now, Pay Later (BNPL) data in its credit scoring models is a significant shift in policy for consumers. Going forward, your BNPL repayment history and loan activity will be visible to lenders and financial institutions.
In a nutshell, this change means your credit score could be positively impacted if you manage your payments responsibly—or negatively affected if you miss payments or take on too much BNPL debt.
