ByAnish
FICO to Include BNPL Loans in Credit Scores: What It Means
BNPL Loans Will Soon Impact Your Credit Score—Here’s What You Need to Know
If you’ve ever used a Buy Now, Pay Later (BNPL) option to split up a purchase—say, for that $600 collectible Labubu figure—your credit score might soon reflect it.
Starting this fall, FICO will begin factoring BNPL loan data into its credit score calculations, a major shift in how creditworthiness is assessed. This comes as BNPL lenders like Affirm have started reporting payment data to credit bureaus such as Experian and TransUnion.
Why This Matters
Until now, most BNPL loans haven’t impacted credit scores—meaning on-time payments didn’t help you, and missed ones didn’t hurt. That’s about to change.
According to FICO:
Responsible BNPL usage could boost credit scores, especially for users with limited credit history.
Missed BNPL payments, however, could negatively impact your score.
With the BNPL market projected to grow to $108 billion in 2025 (up from $94B in 2024), FICO’s update aims to close a major blind spot in how consumer debt is measured.
A Closer Look at the Risks
As BNPL becomes more mainstream, so do defaults. Klarna, a leading BNPL provider, recently reported an uptick in loan defaults—from 0.51% to 0.54%. Critics argue that these one-click loans are fueling phantom debt, with consumers racking up obligations that lenders can’t fully track.
Not Everyone Will Be Affected Immediately
It’s worth noting that BNPL data will only be included in FICO’s two newest scoring models—not the older versions still widely used by lenders. So, while this is a big step, it could take years before BNPL history becomes a standard part of credit evaluations.
Final Thoughts
This move by FICO is a double-edged sword. On one side, it rewards responsible shoppers with better credit visibility. On the other, it adds a new layer of risk for those relying too heavily on short-term loans.
