Buy now, pay later (BNPL) services have surged in popularity, with over half of American consumers using them at least once in the past year. These services allow consumers to break down purchases into manageable installments, often preferred over traditional credit cards. However, significant changes are on the horizon as major credit bureaus—Experian, Equifax, and TransUnion—plan to include BNPL loans in credit score calculations. This shift aims to provide a more comprehensive view of a consumer's financial behavior. While timely payments can enhance credit scores and offer a pathway for individuals lacking traditional credit access, missed payments could lead to negative repercussions. The impact of BNPL on credit scores remains uncertain, particularly regarding how short-term loans will fit into the existing credit history framework. Critics warn of high fees for late payments and a lack of consumer protections, making it essential for users to manage these loans responsibly to avoid damaging their credit.
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