Key Takeaways:
- Missed payments on buy now, pay later (BNPL) loans may affect certain credit decisions.
- BNPL loan data provided to TransUnion is not currently included in credit score calculations provided by TransUnion.
- 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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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?
Your account and payment history with select BNPL loans may now be seen by lenders when you apply for credit, which could impact certain credit decisions. While some BNPL loan information is on your credit report, it still does not impact credit scores provided by TransUnion. This may change in the future.
Important Note:
When and how BNPL data is adopted by credit score providers may vary. There are different credit scoring companies and they have different versions or models of their credit scores. Not all BNPL companies report their data to credit reporting agencies. If you have a BNPL loan, you can contact the lender to see if they plan to report.
Are missed payments on BNPL loans reported to credit reporting agencies?
Some BNPL loans may appear on your credit report, so if you miss a payment, that could be shown on your credit report. BNPL credit participation is expanding and BNPL lenders are gradually integrating data into the credit reporting ecosystem. Some BNPL history, which can include your payment history, can now be viewed by lenders and may impact credit decisions.
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. Further, 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 canwill 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 depth
- Credit utilization
- Balances
- Recent credit
- Available credit
Know the credit score factors
While not all credit score providers include BNPL loan information in their credit score calculations, this may change in the future. 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.
