'Buy now, pay later' impacts credit scores
FICO is set to start including "Buy Now, Pay Later" (BNPL) loan info in its credit scores this fall.
With BNPL services booming—15% of American adults having used them in 2024—this update means lenders will get a clearer view of how people handle these payments.
BNPL can help or hurt your credit
If you use BNPL and pay on time, your credit score could actually go up or stay steady.
FICO's study found that most people with several BNPL loans saw no drop in their scores.
But heads up: about one in four users paid late last year, which can hurt your score.
Will BNPL loans help build your credit?
Yes—timely payments on BNPL loans might help you build credit history, especially if you're just starting out.
Just remember, unlike credit cards, BNPL doesn't offer the same protections if there's a problem with a purchase or dispute.
Why FICO is adding this data
FICO says adding BNPL data helps make lending fairer and more inclusive, especially for younger folks and those without much credit history yet.
The goal is to give a more accurate picture of how responsibly people manage their money—even outside traditional loans and cards.