FICO to include 'Buy Now, Pay Later' data in US consumer credit scores
Starting later this year, Buy Now, Pay Later (BNPL) loans will be included in Americans' credit scores, giving lenders a clearer view of repayment behaviour.
FICO has announced that its new models, FICO Score 10 and FICO Score 10 T, will incorporate BNPL data, marking the first time major credit scores reflect this growing payment method.
BNPL loans let consumers split purchases into smaller payments, often for items like clothes, flights, or groceries. Until now, BNPL activity has been excluded from credit reports, leaving a gap in how lenders assess creditworthiness.
FICO's decision aims to offer a more complete picture of an individual's financial behaviour.
For younger consumers or those with limited credit histories, BNPL could help build credit. New York Times reported that BNPL could serve as a "credit-builder" if used responsibly.
“FICO plans to launch a suite of credit scores later this year that incorporate BNPL data, providing lenders a window into what’s been a big blind spot: consumers’ repayment behavior on these increasingly popular installment loans.https://t.co/SWJwmdqDmN pic.twitter.com/Kt0IeOb1kW
However, concerns remain. BNPL loans may encourage overspending, with nearly half of users in a Bankrate survey reporting issues, particularly overspending. Frequent BNPL use can lead to “phantom debt” not visible to credit agencies.
BNPL doesn’t behave like traditional credit. Opening and closing multiple BNPL accounts in a short time could hurt credit scores, similar to maxing out a credit card.
FICO’s new scoring model, developed with Affirm, aggregates BNPL data to avoid penalising responsible users.
BNPL activity has been a "black box" in credit scoring, with only a few providers, like Affirm, reporting data to credit bureaus. FICO’s model, launching in fall 2025, will integrate BNPL data into widely used scores.
Despite the benefits, the rollout of the new FICO scores may take time, with many lenders still using older versions, like FICO Score 8.
As BNPL becomes more common, its inclusion in credit scores could reshape borrowing and repayments, but questions remain about its long-term impact on creditworthiness.