“Buy Now, Pay Later” (BNPL) services—offered by companies like Affirm, Klarna, Afterpay, and PayPal—have exploded in popularity over the past few years. They allow consumers to make purchases and pay for them over time in smaller installments, often interest-free if paid on time. For many shoppers, BNPL is a convenient and flexible alternative to credit cards.
However, as their use becomes more widespread, BNPL loans are starting to factor into credit scores, bringing both opportunities and risks for consumers.
The Evolution of BNPL and Credit Reporting
Historically, most BNPL loans were not reported to the major credit bureaus—Equifax, Experian, and TransUnion—so they had little to no impact on your credit score. But this is changing.
In 2022 and 2023, credit bureaus began working with BNPL providers to incorporate this data into consumer credit files. This shift is intended to give lenders a fuller picture of someone’s financial obligations and payment habits. Equifax and TransUnion have both developed methods to capture BNPL data in their credit reporting systems, while Experian has started adding BNPL accounts to credit reports through partnerships with participating lenders.
How BNPL Affects Credit Scores Today
Currently, the impact of BNPL loans on your credit score depends on how the lender reports the loan, and which scoring model is being used.
1. Payment History
BNPL loans that are reported to the credit bureaus can influence your credit score by adding to your payment history—a major factor in credit scoring. On-time payments can help boost your score, while late or missed payments could hurt it.
2. Credit Mix
If BNPL loans are reported as installment loans, they can help diversify your credit mix, which may have a small positive effect on your score, especially if your credit profile is limited.
3. Length of Credit History
Most BNPL loans are short-term—typically paid off in 6 weeks to a few months. Because of this, they don’t contribute much to the length of your credit history, and may even cause short-term dips in your score when accounts are opened and closed rapidly.
4. Hard vs. Soft Inquiries
Some BNPL providers perform a soft credit check that doesn’t affect your score, while others may perform a hard inquiry, which can cause a temporary dip. Always check a BNPL provider’s terms before applying.
5. Debt-to-Income and Utilization Ratios
Although most BNPL loans are not revolving credit like credit cards, frequent borrowing can signal high debt levels or financial overextension—especially if they’re used often without a clear repayment strategy.
Different Scoring Models Handle BNPL Differently
Credit scoring models like FICO 8 and VantageScore 3.0 may not yet factor in BNPL data fully, but newer models—like FICO 10 and VantageScore 4.0—are designed to include more types of alternative credit data, including BNPL loans where available.
This means that even if BNPL doesn’t impact your current score, it might in the near future as credit scoring continues to evolve.
What Consumers Should Know
- Check if Your BNPL Provider Reports to Credit Bureaus
Not all do, and practices vary by provider. For example, Affirm reports some loans to Experian, while Afterpay does not currently report at all.
- Make Payments On Time
Just like with any loan or credit card, missing BNPL payments can hurt your credit if the account is reported.
- Avoid Overuse
Using BNPL too frequently can create budgeting issues and signal risk to future lenders if usage patterns are visible on your credit report.
- Monitor Your Credit Reports
Regularly check your credit reports to see if BNPL accounts are showing up, and make sure the information is accurate.
Conclusion
BNPL loans are gradually becoming part of the credit landscape. For consumers, this brings the potential for both credit-building opportunities and new risks. As reporting becomes more consistent and scoring models adapt, the way you use BNPL could directly influence your financial future. Responsible use—keeping track of what you owe, making payments on time, and avoiding overextension—is key to making BNPL work for, not against, your credit score.
About the Author
Marissa Berends is a Certified Abstractor and Industry Relations Coordinator at Capitol Lien, a nationwide due diligence and risk mitigation services provider. Since joining the company in September 2021, she has earned abstractor certifications in Minnesota, Nebraska, and North Dakota. She is pursuing her Wisconsin Title Examiner certification, which is expected to be completed in Fall 2025.
Marissa is involved with the following groups: Wisconsin Land Title Association’s (WLTA) Convention Committee & Young Title Professionals; Nebraska Land Title Association’s (NLTA) Convention Committee; Property Record Industry Association (PRIA) National Education Committee; Illinois Land Title Association’s (ILTA) Inclusion, Diversity, Equity & Acceptance (IDEA) Committee; and the National Association of Land Title Examiners and Abstractors (NALTEA).
About Capitol Lien
Capitol Lien empowers real estate and title professionals with trusted public record research and due diligence services nationwide. With 35 years of experience, Capitol Lien specializes in fast, accurate property and title searches, lien reports, and document retrieval that help title agents, underwriters, and legal teams operate their businesses with confidence. The Capitol Lien team takes the hassle out of title research with local experts and innovative tools that make it easier to mitigate risk, stay on schedule, and keep your closings moving smoothly.
Learn more at capitollien.com. Ready to simplify your title research? Send your next order to Capitol Lien and experience the difference trusted diligence makes. Stay in touch with Capitol Lien on LinkedIn for industry updates and information. Reach out! contact@capitollien.com or 800-845-4077