Buy Now, Pay Later Loans to Impact Credit Scores
Photo by Julio Lopez
Starting in October 2025, Buy Now, Pay Later (BNPL) loans will start showing up on credit reports, marking a big change announced by the major credit bureaus: Transunion, Equifax, and Experian. According to Morning Brew, this means that the payment history for BNPL loans could actually influence consumers’ credit scores, which is a departure from how these loans were previously left out of credit reporting. FICO is planning to incorporate BNPL data into its credit score calculations, which could affect people’s chances of getting future loans, mortgages, or credit cards. With more than 40% of U.S. adults using BNPL services for their interest-free, short-term payment options, this shift could really change how millions of people handle their finances.
BNPL services, provided by companies like Affirm, Klarna, and Afterpay, let consumers break down their purchases into smaller, more manageable payments, often without any interest. However, if payments are late or missed, it could hurt credit scores, while making payments on time could actually boost credit profiles. Right now, Affirm and Apple report some BNPL loans to Experian, but others, like Klarna and Afterpay, haven’t fully embraced this practice yet. Consumer advocates are raising concerns, pointing out that nearly 30% of BNPL users admit to overspending because these services make it so easy. This could lead to piling up debt, hefty late fees, or even damaged credit if payments aren’t made on time.
The addition of BNPL to credit reports highlights the need for responsible borrowing. Consumers should keep an eye on their spending and make sure they pay on time to avoid penalties and protect their credit scores. As BNPL continues to gain traction, understanding its effects on financial health is essential for making smart choices.
To read more go to the original article
Disclaimer: My Home Pathway is a technology driven risk improvement platform. We are not a mortgage broker or lender and are not representatives of any home loan programs. We are not a credit repair company, HUD certified counseling agency, or one on one home counselor. While we offer mortgage related services, we are not a bank, non profit organization, foundation, or real estate agency. We may partner with those organizations to provide content and access related to our services.
The information provided is for educational purposes only and should not be considered credit repair advice or housing counseling services. For credit repair assistance or housing counseling, please consult with appropriate certified professionals or HUD-approved agencies.
Fintech Founder at My Home Pathway. VC Backed Startup. Financial Inclusion Leader and Speaker.
Risk and project management professional with experience in Federal Reserve banking regulations, risk management policies as well as risk management advisory services. Critical skills include credit risk analysis, capital markets, strategic planning, current state assessments and target operating models. Ability to assess evolving regulatory guidelines and potential impact on financial services organizations operationally and strategically.
Mr. Johnson received his Bachelor of Science in Management and International Business from Penn State University where he was a Bunton Waller Scholar and Division 1 athlete and his MBA in Finance and Accounting from New York University.
