Remember when buy now, pay later (BNPL) felt like a secret shopping hack? Split that $200 jacket into four easy payments and avoid credit card interest while keeping more cash in the bank. While convenient, those carefree BNPL days are about to get a reality check.
Starting this fall, your Klarna and Affirm habits could show up on your credit report — and that’s either great news or a wake-up call, depending on how you’ve been handling those installments.
What’s actually changing with BNPL
FICO, the company behind the credit scores that many lenders use to evaluate borrowers, just announced it’s adding two new credit scoring models this fall: FICO Score 10 BNPL and FICO Score 10 T BNPL. These will be “the first credit scores from a leading credit scoring provider to incorporate Buy Now, Pay Later (BNPL) data,” according to a recent FICO press release.
How this works in practice
The key thing to understand is that these new BNPL-enhanced credit scoring models aren’t replacing your current FICO credit score right away. Instead, lenders will be able to see two versions of your credit score side-by-side, at least for now:
Your regular FICO score without BNPL data
Your BNPL-enhanced score
If you don’t use BNPL services, both scores should be identical. If you do use BNPL, the BNPL-enhanced score gives lenders a fuller picture of your payment habits.
Why lenders wanted this change
Until now, most BNPL companies haven’t been reporting your payment history to credit bureaus. That meant lenders couldn’t see how you handled those installment payments when evaluating your creditworthiness.
FICO said it developed these new scoring models after seeking input from many of the largest lenders in the U.S. According to the press release, there was “broad consensus” among lenders that “integrating BNPL data into credit scoring is a critical advancement that allows lenders to make more informed, accurate decisions while responsibly expanding credit access.”
The goal, according to FICO, is to give lenders “greater visibility into consumers’ repayment behaviors” and “a more comprehensive view of their credit readiness.” Lenders told FICO they wanted this broader picture of consumer credit behavior to make better lending decisions.
Who’s really using BNPL (and how much)
Nearly half of Americans have used a BNPL service, according to a recent LendingTree survey of 2,000 consumers. But dig deeper into the data, and these stats paint a concerning picture of today’s economy:
Most users don’t stop at one loan. The majority say they’ve held multiple BNPL loans at one time, with 60% juggling more than one and 23% who have held three or more.
They’re not just for big purchases anymore. A quarter of BNPL users say they’ve used the loans to buy groceries, up from 14% the previous year.
Perhaps most telling: About one-third of BNPL users see the loans as a bridge to their next paycheck, suggesting many people are using these services because they’re financially stretched.
Additionally, nearly half of BNPL users say they’ve regretted buying something with BNPL — a sign that these quick decisions aren’t always in borrowers’ best interests.
Learn more: 5 places you shouldn’t use your debit card (and 3 times when you should)
How this could help or hurt your credit score
For responsible users, this change could boost their credit scores. However, late payments on BNPL loans are becoming more common. Last year, 41% of BNPL users said they paid late on at least one loan, up from 34% the year before. That’s a seven percentage point increase in missed payments.
This trend matters because payment history is the most important factor in your credit score, making up 35% of your FICO score calculation. Even one late payment can drop your score by 60 to 110 points, depending on your current score and credit history. If BNPL payment data starts showing up on credit reports, those missed installment payments could significantly damage credit scores for borrowers who’ve been casual about due dates.
Learn more: Tariffs are about to make online shopping more expensive: 10 simple workarounds
5 smarter ways to fund your purchases
If you’re a responsible BNPL user who always pays on time, this change could actually help your credit score by rewarding you for BNPL payments that were previously invisible to lenders.
But if you’ve been casual about BNPL payments, now’s the time to get serious. Here are smarter ways to manage purchases without hurting your credit:
Keep your savings in a high-yield account. Whether you’re building an emergency fund or just parking cash, use a high-yield account to earn passive income that helps your savings stay ahead of rising prices.
Use budgeting apps to track all your payments. Budgeting apps like YNAB, SoFi Relay and Rocket Money help you see a clear picture of your finances, including your debts and monthly obligations. This makes it easier to budget for BNPL payments and avoid taking on more payment plans than you can handle.
Consider intro APR credit cards for larger purchases. Most 0% intro APR cards typically offer 12 to 21 months without interest and already report to credit bureaus, so you’ll build positive credit history with on-time payments. Unlike BNPL, you may also get purchase protections and rewards.
Apply the 24-hour rule for non-essential purchases. Wait a full day before buying anything over $100 with BNPL to avoid impulse purchases that strain your budget. This simple pause often helps you see whether you actually need the item or just want it.
Calculate the true cost before placing an order. Don’t get fooled by that small installment payment. Add up all four BNPL payments and ask yourself if you’d pay that full amount today.
Learn more: How healthy are your finances, really? 4 money questions to ask yourself today
The bottom line
BNPL isn’t inherently evil — it can be a useful tool for managing cash flow or avoiding credit card interest. If you’re going to keep using these services, it’s critical to treat them like any other form of credit: budget carefully, pay on time and don’t use them to buy things you genuinely can’t afford or don’t need.
Make sure you understand the factors that can hurt your credit and work on developing solid budgeting habits that can help you manage all your payment obligations without hurting your financial future.
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