Non-bank lenders, particularly in the fintech space, have revolutionized financial services, enhancing access to credit for many consumers. However, their lack of information sharing poses risks, especially in the rapidly growing "buy now, pay later" (BNPL) sector. This article investigates the effects of credit reporting regulations on BNPL usage, focusing on a significant regulatory change in China in 2021 that integrated Huabei, a major BNPL provider, into the national credit registry. Analyzing data from 200,000 BNPL users, the findings reveal that credit reporting significantly reduces BNPL usage by an average of 14%. This decline is more pronounced among users with default histories, who also demonstrate improved repayment behavior. Additionally, the regulation appears to attract older, more experienced users who are more cautious in adopting BNPL services. Survey results further indicate that concerns about credit records are a primary deterrent for consumers considering BNPL, highlighting the importance of information sharing in mitigating overborrowing risks.
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