Buy Now, Pay Later (BNPL) loans are installment loans established at the point-of-sale for the purpose of financing a one-time, unsecured retail transaction. They allow you to finance a purchase with multiple, equal payments instead of one lump sum.
Buy Now, Pay Later
Learn more about Buy Now, Pay Later loans, discover how they work and get tips for using them.
What is Buy Now, Pay Later?
Buy Now, Pay Later Usage
Whether you’ve taken out a BNPL loan or not, you may see more stores offering it at checkout. In 2024 research by TransUnion, here's what we're seeing about U.S. consumers’ familiarity with these loans, and how they’re using them:
Tips for Using BNPL
Whether you’ve taken out a BNPL loan before or are considering trying one for the first time, it’s a good idea to understand how they work.
Exploring Your Credit Report
You may see BNPL loans listed among your accounts on your credit report. Use our tool to learn more about each section of your TransUnion Credit Report.
Lenders, Furnishers and BNPL
TransUnion has been working with BNPL lenders for more than five years to ensure data is being thoughtfully incorporated into credit reports.
You have questions, we have answers.
What is Buy Now, Pay Later, or BNPL?
A Buy Now, Pay Later (BNPL) loan is an installment loan established at the point-of-sale for the purpose of financing a one-time, unsecured retail transaction. This may include loans referred to as “Buy Now, Pay Later” loans that are expected to be repaid over four or six payments, or other longer term loans where consumers may have multiple loans over a relatively short period of time (e.g., over the course of a year).
Are all BNPL companies reporting their data to the credit bureaus?
Not yet, but they may in the future. If you have a BNPL loan, you can check with the company to see if they will be reporting to any of the three nationwide consumer reporting agencies (TransUnion, Experian and Equifax).
Will BNPL loans impact my credit score provided by TransUnion?
At this time, Buy Now, Pay Later information provided to TransUnion is visible to you, but scoring providers, lenders, insurers or other authorized companies that may access your credit report will not be able to use this data. As a result, the BNPL data provided to TransUnion will not affect credit decisions or credit scores.
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).
Will BNPL purchases that I’ve made in the past be visible on credit reports?
Once a BNPL company begins furnishing data to TransUnion, only loans originated after that initial date will appear on your credit report.
If I miss a Buy Now, Pay Later payment, will it impact my credit score?
No, because BNPL data provided to TransUnion will not affect credit decisions or credit scores.
In the future, some credit scores may begin to incorporate BNPL data provided to TransUnion, and missed payments could then impact those scores.
Will an inquiry show up on my credit report if I take out a Buy Now, Pay Later loan?
You’ll see a soft inquiry on your credit report if you apply for a BNPL loan. However, lenders do not see soft inquiries, and they do not impact credit scores.
Where can I find Buy Now, Pay Later installment loan information on my credit report?
If you have a BNPL loan with a lender that is supplying the data to TransUnion, you’ll see the information within the Accounts section of your credit report. Longer term installment loans made at the point of sale for a single transaction may also appear in this section.
How will missed BNPL payments appear on my credit report?
Lenders may report your BNPL account as delinquent if you miss a payment and it remains unpaid for 30 or more days past the scheduled due date. At this time, Buy Now, Pay Later information provided to TransUnion is visible to you, but scoring providers, lenders, insurers or other authorized companies that may access your credit report will not be able to use this data. In the future, the data will become available to these authorized users, who may use your BNPL installment loan information to better understand your history with credit and aid in their assessment of your creditworthiness.
Some BNPL products require payments every two weeks; how will this be displayed based on my payment plan?
If you agreed to make payments every two weeks, the total of two payments may combined and represented as a monthly payment.
Some BNPL products are only six weeks long; how will this be displayed on my credit report?
The term length will display on your credit report in months, rounding up to the nearest total month. For example, a typical pay-in-four loan that has a down payment and three payments over six weeks will display on a credit report with a term of two months.
Will this impact my chances of getting approved for credit or how lenders view me?
At this time, lenders will not be able to view your BNPL data, and the BNPL data provided to TransUnion will not affect credit decisions or credit scores.
In the future, the data will become available to lenders. Lenders may use your BNPL installment loan information to better understand your history with credit and aid in their assessment of your creditworthiness. As with other loans, a history of making on-time payments on a BNPL loan may positively impact how lenders view you. A history of late payments may negatively impact how lenders view you.
What happens after I pay off my BNPL loan?
The BNPL loan information, like any other installment loan, will remain on your credit report after you pay it off. An account that was in good standing with a history of on-time payments when you closed it will typically stay on your credit report for up to 10 years. Accounts with adverse information may stay on your credit report for up to seven years.
What is the purpose of BNPL appearing on credit reports?
As BNPL continues to become more popular, the lending industry will eventually use this information to help evaluate the creditworthiness of a consumer. Ultimately, it can be a way to show lenders you pay your installment loans back on time.
Will BNPL information appear on all credit reports at the same time?
Other nationwide consumer reporting agencies (Experian or Equifax) may have different timelines for presenting BNPL data, so you may see differences between your credit reports.
What if something looks inaccurate with my BNPL loan on my credit report?
If you recently paid your BNPL loan, you may not see that payment reflected on your credit report until your next monthly statement. Credit reports update when lenders provide new information to the credit reporting agencies, so you may not see changes reflected immediately in your report. However, if you want to dispute an inaccuracy around your BNPL installment loan, you can do so for free through the TransUnion Service Center.
Why do I not see all my BNPL loans on my credit report?
TransUnion is working directly with BNPL companies as they move towards reporting this data. Many of these companies have not reported to credit reporting agencies before, so they need time to build both furnishing and disputes processes. It’s important to get these processes right to ensure accuracy and protect consumers.
In the interim, consumers will only see BNPL loans on their credit reports from the BNPL companies that are ready to provide this data and willing to furnish it to TransUnion.
What if I do not have any BNPL installment loans?
You may receive communication from TransUnion regarding BNPL installment loans. If you do not have any BNPL installment loans, these communications will not apply to you.
Are other nationwide consumer reporting agencies including BNPL installment loans in their credit reports?
BNPL installment loans may appear on credit reports differently based on the nationwide consumer reporting agency (also known as a credit bureau). Please visit the websites of the other credit bureaus to learn more about their treatment of BNPL installment loan accounts in their respective credit reports.
What You Need to Know:
The credit scores provided are based on the VantageScore® 3.0 model. Lenders use a variety of credit scores and are likely to use a credit score different from VantageScore® 3.0 to assess your creditworthiness.
Subscription price is $29.95 per month (plus tax where applicable). Cancel anytime.
Information for Good®.
Connect with us
