How BNPL Is Impacting Credit Scores: What You Need to Know

1. 📈 What Is BNPL — and Why It Didn’t Affect Credit Scores Before

Traditionally, BNPL purchases (from services like Afterpay, Klarna, or Affirm) haven’t influenced credit scores. That’s because most providers only perform soft credit inquiries—which don’t affect your score—and rarely report on-time payment history to credit bureaus.

2. FICO Introduces BNPL Data Into New Scoring Models

FICO is rolling out FICO Score 10 BNPL and 10 T BNPL in Fall 2025, which will include BNPL repayment behavior as part of the credit-scoring process. Some providers like Affirm and Zilch already report to credit bureaus voluntarily; others may follow suit.

3. How Short-Term BNPL Is Ruining Your Credit Score

Short-term BNPL plans—like the “pay in 4” options over 6–8 weeks—may seem harmless, but they can backfire quickly:

• Loan stacking: Many users take on multiple small BNPL loans simultaneously, making it easy to miss a payment or lose track.

• No grace period: Unlike credit cards, BNPL doesn’t offer a billing cycle grace period. Missing a due date can lead to immediate late fees or collections.

• High frequency = risk flag: Even if payments are made, frequent short-term BNPL use may signal risk to lenders under the new FICO models. It’s similar to “chronic borrower” behavior.

• Negative reporting is growing: Some providers are beginning to report missed payments for short-term plans, even if on-time payments aren’t being shared—skewing credit data negatively.

• False sense of affordability: Because the short-term loans seem small, users may overextend and disrupt their budget—leading to bank overdrafts or other credit issues.

Short-term BNPL may not involve large amounts of money, but the frequency and fragility of this borrowing pattern can quietly damage your credit if you're not disciplined.

4. Positive Effects: Responsible Use Can Build Credit

If your BNPL provider reports on-time payments, it can:

• Boost your payment history (35% of FICO)

• Improve your credit mix (10%)
  Especially helpful for younger users or those with limited credit histories.

5. Risks: Late Payments Can Hurt Hard

Missed or late BNPL payments—if reported—will negatively impact your credit score. Defaults may be sent to collections after ~90–120 days past due. Given payment history is weighted most heavily in FICO scoring, the damage can be significant.

6. Who Could Be Most Affected

• Gen Z and younger users, who are heavy BNPL adopters, have higher delinquency rates.

• Subprime borrowers, who make up over 60% of BNPL users—might respond poorly to reporting changes.

• Consumers facing “loan stacking”—multiple overlapping BNPL plans—risk overextension and missed payments.

7. Practical Tips: How to Use BNPL Without Harming Your Credit

• Confirm reporting policies: Know if your provider reports both on-time and missed payments.

• Use autopay and set reminders for all due dates.

• Limit overlapping BNPL purchases to keep your budget in control.

• Don’t treat BNPL as income or free credit—treat it like a loan.

• Check your credit reports regularly for any unexpected entries.

8. What Lies Ahead

The rollout of BNPL-inclusive FICO scores begins in Fall 2025. Effects will depend on how quickly BNPL providers adopt reporting and how lenders choose to use this data. But one thing is certain: the BNPL habits you build now will shape your credit profile tomorrow.

Final Takeaway

Short-term BNPL plans may feel like easy, no-strings-attached options—but they're fast becoming visible to credit scoring systems. What used to be “invisible debt” is now trackable and impactful. Manage your BNPL use wisely, especially short-term loans, or risk eroding your credit score one small payment at a time.