Does a BNPL Loan Show Up on Your Credit Reports?

Buy Now, Pay Later (BNPL) is a payment method that has grown rapidly in recent years. Among other things, it’s made credit available to people who otherwise might not qualify. 

BNPL has both similarities and differences with credit cards and loans. For one thing, it could all invite the kind of debt that means you might need to seek debt relief. But, until recently, one important difference was the impact of BNPL on your credit. 

In the past, BNPL loans didn’t affect your credit reports and credit scores. That’s changing. If you plan on using BNPL, it's wise to know how it could affect your credit reports—for better or worse. 

BNPL Loans and Credit Reports

When you use Buy Now, Pay Later (BNPL) to pay for something, you're basically taking out a very short-term loan. You put some money down and agree to pay the remainder, usually in three additional payments. These payments are typically spread out over a month or two.

A BNPL provider such as Klarna or Sezzle takes care of sending the money to pay the merchant for the purchase. So you’re actually borrowing from the BNPL provider, not the merchant. Your subsequent payments then pay back the loan from the BNPL provider. 

In the past, these loans weren't reported on credit reports or credit scores. That's starting to change.

In June 2025, FICO announced it would start including BNPL loans in some versions of its credit scores. This development won't immediately make BNPL loans a standard part of credit reporting. 

That depends on BNPL providers reporting their loans to the three main credit reporting agencies—Equifax, Experian and TransUnion—that compile credit reports. In turn, those agencies will have to decide how to use BNPL activity in their reports. 

Including BNPL loans on credit reports may take some time to gain traction. Still, FICO reported interest from lenders for this information. That demand could provide the momentum for BNPL reporting to become commonplace on credit reports. 

Is that good news or bad news for consumers? The answer depends on how you use BNPL.

Benefits of Using BNPL Loans in Credit Scores

Lack of credit qualifications may limit credit access for an estimated 100 million or more Americans. The reasons could be: 

• Insufficient credit history

• Past problems with credit

Many consumers find themselves stuck in a classic catch-22. They need to use credit to build their credit records, but they can't get access to credit without a better credit history. 

Consumers with scant credit history could find BNPL helpful. BNPL loans are usually available to people who would otherwise have trouble qualifying for credit. Most BNPL borrowers have below-prime credit scores. Young adults, who typically have thin or non-existent credit histories, are more likely to use BNPL than older consumers. 

If BNPL loans are included in credit scores, people with poor credit or limited credit histories could have a new avenue to build a credit history. 

Better yet, they'll have a good chance at making that history a positive one. BNPL loans often require automatic payments from the borrower's bank account. This has helped give BNPL loans a default rate that’s lower than the default rate for credit cards.

Drawbacks of Using BNPL Loans in Credit Scores

BNPL loans may represent an opportunity for many consumers, but there’s definitely some risk involved. 

The impact of your credit record depends on the kind of history you build. Use credit in moderation and make on-time payments, and that record should help you. Take on too much debt and miss some payments, and that record may start to count against you. 

This is where some potential drawbacks of including BNPL on credit records come into play:

• Easy access to BNPL could encourage consumers to borrow more than they can afford. 

• BNPL users tend to stack loans—they’re more likely than other borrowers to have two or more loans open at the same time. 

• BNPL users are also more likely to owe money on other forms of credit, such as traditional loans and credit cards.

The total amount you owe is a factor in credit scores. If you layer BNPL loans on top of traditional credit balances, your credit reports will show you as owing more money. That could hurt your credit scores.

Additionally, having BNPL loans could impair a consumer's ability to make payments on other debts. People who use BNPL often have higher balances owed on other unsecured credit accounts than non-users. Even if BNPL payments are automated, having to make those payments could leave less money to pay down other debts.

Payment history is the biggest factor in credit scores. Having more payments to make could put consumers at a higher risk of falling behind on some of their payments. 

Tips for Building Credit—With or Without BNPL Loans

BNPL loans provide consumers with greater access to credit. Including BNPL loans on credit reports likely carries both a benefit and a risk:

• Benefit: More consumers could get a chance to build a credit record.

• Risk: Taking on additional debt could hurt the credit records of some consumers.

Before you choose to use BNPL, keep in mind there are other strategies to build your credit history:

• Get a secured credit card. These require an upfront deposit but give you an opportunity to show you can handle making on-time credit card payments. That could help you get a conventional credit card later on.

• Find someone who will make you an authorized user on their credit card. As long as the account is in good standing and has a low balance, this could help beef up your credit history.

• Use a credit builder or payday alternative loan. These are loans specifically designed for people without strong credit qualifications. Both loan products have some limitations, but using them can help you build a credit history that will give you more options in the future.

• Manage your student loan payments. Many people who use BNPL already have student loans. Those loans may seem like a burden, but they’re also an opportunity to establish a credit record. Ask your loan servicer about an income-driven repayment program. This could help you build a positive payment record. 

Whether you use BNPL or some other method to build credit, have a plan for repayment before you borrow the money. This will usually improve your chances of using credit successfully. In turn, that success should lead to more chances to use credit in the future.