From Yahoo Finance: 2025-06-27 11:21:00

FICO will start including Buy Now, Pay Later loans in credit scores in fall 2025. This change will give lenders a more comprehensive view of consumers’ repayment behaviors. Different scoring models can take years to be adopted in lending decisions, according to NerdWallet spokesperson Sara Rathner.

A joint study by FICO and Affirm found that including BNPL data impacted credit scores similarly to opening a new account, with an average change of about 10 points for most consumers. Younger generations are the most common users of digital BNPL loans, with apps like Klarna, Affirm, and Afterpay making it easy to secure loans.

The use of BNPL loans among Gen Z and Millennials has increased, with about 10% of each cohort taking advantage of them, according to a Bank of America report. FICO’s new scoring model could benefit responsible BNPL users by recognizing their on-time payment habits.

Consumers using BNPL loans should read the fine print, Rathner advises. These loans can lead to stricter repayment schedules than credit cards, potentially resulting in late fees and high-interest rates. If concerned about credit score impact, Rathner suggests checking it online for accuracy.

If denied a loan or unhappy with terms, consumers should speak to the lender about the decision factors. If they believe a decision was unfair due to inaccurate information, they can file a complaint with the Consumer Financial Protection Bureau. Understanding BNPL loan terms is crucial for financial responsibility.

Read more: Buy Now, Pay Later loans popular among Gen Z, Millennials will soon affect credit scores