Buy Now, Pay Later Loans to Impact Credit Scores: The Good, the Bad, and the Ugly
FICO is implementing a new credit scoring model that will factor in “Buy Now, Pay Later” (BNPL) loans, which previously weren’t considered in credit scores. This change, available to lenders this fall, aims to give a clearer picture of consumer repayment behavior, though widespread adoption may take time. The integration of BNPL loans could help consumers who pay on time improve their credit scores, while also providing a more accurate assessment of a consumer’s financial obligations. However, concerns exist that integrating BNPL into credit scores could negatively affect those already facing credit challenges, despite the possibility of an increase in credit score for some users.
John Q. Hosedrinker