Key Points
- FICO is launching a new credit score model that includes BNPL loans.
- Consumers may see their scores rise or fall depending on how these loans are used.
- The changes will roll out gradually, with uneven effects across lenders and borrowers.
Buy Now, Pay Later (BNPL) loans have surged in popularity among younger shoppers, offering a way to split purchases into multiple installments with little or no interest. They come from names like Affirm, Klarna, and Afterpay.
But these short-term loans, long absent from traditional credit reporting, are set to become more visible to lenders. FICO, the company behind the most widely used credit score, announced it will launch a new model that incorporates BNPL activity. For some consumers, this could mean higher credit scores. But for others, it could bring unwelcome surprises.
Until now, BNPL loans were largely invisible to credit scoring models. Most providers didn’t report them to bureaus, and the bureaus had no standard way to integrate them. But starting this fall, FICO’s new scoring formula will give lenders the option to factor BNPL payments into their decisions.
That marks a shift in how millions of small-dollar loans could affect access to credit cards, car loans, and mortgages.
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Why Reporting BNPL Loans Matters
Credit scores rely on several factors: payment history, amount of debt, length of credit history, credit mix, and new credit. BNPL loans, often paid off in weeks or months, can interfere with these categories in different ways.
Closing multiple short-term accounts may shrink the average age of a credit report. Opening several BNPL lines at once may look like a flurry of borrowing, raising red flags for some underwriters.
On the other hand, repaying BNPL loans on time could help build a stronger credit report, especially for consumers who don’t have many other accounts. FICO says its study of 500,000 BNPL users showed that scores often stayed the same or improved, even when borrowers had five or more loans at a time (yes, people are having 5 or more BNPL loans at a time).
The model won’t apply automatically. Not all BNPL providers report to credit bureaus, and not all lenders will use the new scores. Still, this is the first clear sign that the credit industry is preparing for BNPL loans to be treated more like traditional debt.
Each Credit Bureau May Treat BNPL Differently
Each of the three major credit bureaus (Equifax, Experian, and TransUnion) is approaching BNPL reporting differently.
Equifax allows BNPL providers to report pay-in-four loans as either revolving or installment accounts, depending on how they are structured. These loans can appear on consumers’ core credit reports and may be included in score calculations.
Experian has launched a dedicated BNPL bureau. While it won’t initially include the loans in its core scoring data, the loans will still appear in a consumer’s report. Experian says this separate bureau is meant to avoid unfair hits to scores due to short-term loan cycles.
TransUnion is also working with FICO and VantageScore on new models, but for now, BNPL loans will be displayed in a separate section of the credit report and not immediately affect the core score. It plans to move toward more frequent biweekly updates, given the short-term nature of the loans.
Who Might Be Impacted The Most
Credit scores have come under added pressure in 2024 and 2025, as millions of federal student loan borrowers resume payments and late payments are being reported. Many have seen their scores dip. At the same time, inflation and interest rates have led more consumers to spread out purchases, including through BNPL. With added reporting and new score formulas, a missed BNPL payment could soon carry greater consequences.
That’s not just a technicality. Credit scores affect everything from mortgage approvals to apartment rentals to job offers. Many people are unaware how a small missed payment on a BNPL loan affects their credit score.
Younger adults, those with limited credit histories, and consumers who use BNPL frequently stand to be affected most. Many of these users rely on BNPL to cover essentials or delay payments without taking on traditional credit card debt. But if those loans now show up as revolving credit or short-term accounts, borrowers could see score fluctuations, especially if the loans are numerous or repaid late.
Final Thoughts
We recommend reviewing credit reports at least every year and asking BNPL providers whether they report to bureaus. If they do, keeping up with installment payments becomes more important, not just to avoid late fees, but to maintain or improve your credit score and not be viewed as a credit risk.
Credit monitoring services can help track changes across all three bureaus. While most free services monitor only one bureau, consumers who rely on BNPL may benefit from a more detailed view from some of the paid options.
Ultimately, the inclusion of BNPL loans in credit scores brings both opportunity and risk. For some, it’s a chance to show they can manage short-term credit. For others, it may add a layer of complexity to an already fragile financial picture.
Common Questions
How do BNPL loans currently affect credit scores?
Currently, BNPL loans do not affect credit scores. But that's set to change in fall 2025.
What changes is FICO making regarding BNPL loans and credit scores?
FICO is going to add BNPL loans to credit reports, which could impact scores depending on how the loan is repaid.
Could BNPL loans improve my credit score?
Yes, like any loan, BNPL loans can improve your score if they're paid off on time.
How might BNPL loans lower my credit score?
BNPL loans could lower your credit score if you have late payments, many loans, lot's of credit checks, or other factors.
Are all credit bureaus handling BNPL loans the same way?
Each credit bureau is handling BNPL loans differently, some even giving options to lenders on what to include.
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Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.