Key Takeaways:
- If you have BNPL loans on your TransUnion credit report, they are only visible to you at this time.
- BNPL loan data provided to TransUnion is not currently included in credit score calculations provided by TransUnion.
- A missed payment on a BNPL loan may not have a direct impact on your credit score at this time, but it could in the future.
- If your BNPL loan account goes to collections after being delinquent, it could impact your credit score both today and in the future.
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This post only contains educational information. No financial, tax or legal advice.
This information is for educational purposes only and we do not guarantee the accuracy or completeness of this information. This information does not constitute financial, tax or legal advice and you should consult your own professional adviser regarding your situation. Trademarks used in this material are property of their respective owners and no affiliation or endorsement is implied.
Buy Now, Pay Later (BNPL) loans are a popular way to pay, whether you’re online or in store. BNPL loans are typically used at the time of sale for a specific purchase, which makes them different from other installment loans. Because there are similarities between BNPL loans and other credit products, you may wonder if your BNPL loans are on your credit report and if missed payments on your BNPL loans impact your credit score.
Do BNPL loans impact my credit score?
Currently, if your BNPL loan information is reported to TransUnion, it is only visible to you. Credit scoring providers and other authorized companies won’t be able to use your BNPL loan data as a part of your credit score calculation or to help them with a lending decision. In the future, this BNPL data furnished to TransUnion may be factored into credit scores and credit decisions (for example, account opening or account review decisions).
Are missed payments on BNPL loans reported to credit reporting agencies?
A missed payment on your BNPL loan account may not directly impact your credit score because BNPL data on your TransUnion credit report is not included in credit score calculations. However, if an account becomes delinquent, your BNPL account could be sold to a collections agency. The collections account may be reported to credit reporting agencies. If a collections account appears on your credit report, it may have a negative impact on your credit score. Collections will remain on your credit report for seven years.
Pro Tip:
Your credit score is determined by how you manage credit. There are different scoring models and each model may have different versions. How the models and their accompanying versions weigh the scoring factors can vary.
Here are the factors that make up a VantageScore® 3.0 Credit Score:
- Payment history
- Credit age and mix
- Utilization
- Balances
- New credit
- Available credit
Know the credit score factors
In the future, credit scoring companies may start incorporating BNPL loan account information into their credit scoring models. It may help to start treating BNPL loans like other credit products. Know the important credit score factors, like payment history, credit utilization, and credit age and mix. Make your BNPL loan payment on time and try to not take on more debt than you can manage.
Continue to practice these responsible habits so you can maintain or build healthy credit when BNPL loans are included in credit score calculations.
