Affirm and FICO are now factoring BNPL payments into credit scores, changing how borrowers are rated.
Short-term installment loans offered by Buy Now, Pay Later (BNPL) providers such as Affirm, Klarna, Afterpay, and PayPal Pay Later have traditionally flown under the radar of credit reporting. But that’s about to change. The Fair Isaac Corporation (FICO) has announced that its newly expanded FICO Score 10 Suite will now include BNPL data, meaning on-time and missed payments alike can affect a borrower’s credit score.
The change, officially announced on June 23, 2025, is intended to provide lenders with a more complete picture of a consumer’s borrowing behavior. The move also comes as Affirm revealed it would begin reporting all Pay in 4 activity, its signature interest-free payment plan, to major credit bureaus Experian and TransUnion.
What’s Changing and Why It Matters
BNPL plans, popular among younger shoppers for breaking down purchases into smaller, interest-free payments, have grown significantly in recent years. A 2024 Bankrate survey found that 39% of Americans have used a BNPL service, with usage highest among millennials and Gen Z.
Historically, these transactions haven’t been reported to credit bureaus unless they turned into collections. Now, Affirm will report both the original and remaining balances, as well as payment history and loan terms, even for short-term purchases.
“The upside is visibility,” certified financial planner Andrew Latham told NTD. “Using BNPL responsibly can now help your credit. But late payments are common, and now they come with consequences.”
ADVERTISEMENT
Experts Weigh In
FICO’s update aims to address the growing importance of BNPL in consumer financial lives. Julie May, vice president and general manager at FICO B2B Scores, said the inclusion of BNPL data supports financial inclusion and allows responsible users to build a credit history.
“By expanding our FICO Score 10 Suite… we’re enabling lenders to more accurately evaluate credit readiness, especially for consumers whose first credit experience is through BNPL products,” May said in a statement.
Some financial experts say the move is overdue. “I’m surprised FICO didn’t do this sooner,” said Erica Sandberg, a consumer finance expert with CardRates.com. “Credit scores help lenders determine risk, and to do that, they need a complete picture.”
Responsible Borrowing Now Has a Reward and a Risk
Until now, many BNPL users have avoided interest and credit scrutiny. But with credit bureaus now involved, the stakes have changed.
“This was a blind spot in the credit ecosystem,” said Liam Hunt, research director at IncomeInsider.org. “Now, missing payments ,even on something as small as a $200 item, could impact your ability to get a mortgage.”
On the other hand, for borrowers with limited or no credit history, responsible BNPL usage could become a stepping stone to better financial opportunities.
ADVERTISEMENT
“This is moving us toward a ‘total credit picture,’ where all forms of borrowing, not just traditional credit cards and loans, are considered,” Hunt added.
Who’s Using BNPL?
BNPL services are particularly appealing to younger and lower-income users. More than half of millennials (55%) and Gen Zers (51%) have used BNPL, compared to 31% of Gen Xers and 25% of baby boomers. Interestingly, usage appears consistent across income levels, pointing to the services’ accessibility.
The most cited reasons for using BNPL are the ability to spread out payments (50%), low or no interest (37%), and ease of credit access (27%).
What Borrowers Should Know
Affirm’s Pay in 4 transactions began appearing on Experian credit reports starting April 1, 2025, and will be included in TransUnion credit reports as of May 1. Consumers can check their reports by creating free accounts on each platform.
“Greater transparency in BNPL activity is key to helping consumers build their credit histories and supporting responsible lending,” said Scott Brown, group president of financial services at Experian North America.
As BNPL continues to evolve, financial professionals recommend treating it like any other form of credit: pay on time, avoid over-borrowing, and regularly review your credit reports.
