After years of debate, Buy Now, Pay Later (BNPL) services are set to impact consumer credit scores. The payment method, popular for allowing shoppers to split purchases into smaller installments, has become a trusted alternative to credit cards. According to Money Wise, 86% of Americans say they trust BNPL, and three out of four users prefer it over traditional credit.
Credit Bureaus to Include BNPL Data
Until recently, credit bureaus did not factor BNPL use into credit scores. That is changing as FICO announced it will start including BNPL data in its credit scoring model this fall. Experian will also begin adding BNPL information from Affirm, marking a shift in how consumer payment habits are tracked.
BNPL Usage in the U.S.
Over 30% of Americans have used BNPL services, and in 2024 alone, more than 86 million Americans made purchases using these platforms—up from nearly 50 million in 2021. Analysts expect that number to reach 91 million by 2025.
Impact on Credit Scores
With FICO and Experian’s updates, late BNPL payments will now lower credit scores. However, it remains unclear whether consistent, on-time payments will improve them. FICO scores, ranging from 300 to 850, are based on factors such as payment history, credit utilization, credit length, credit mix, and hard inquiries.
Understanding BNPL Plans
The Consumer Protection BC identifies two main types of BNPL plans:
- Equal payment plans: require fixed payments until the balance is cleared.
- Deferred payment plans: require the full balance by a set date, with no scheduled payments.
Responsible Usage
Experts recommend treating BNPL like a credit card, pay bills on time, avoid multiple overlapping plans, and track due dates to prevent missed payments.
