FICO Credit Scores Will Soon Incorporate 'Buy Now, Pay Later' Loans. Here's How It Works. FICO plans to include "buy now, pay later" histories in credit scores, marking the first time a leading credit score provider will include the data.
By Sherin Shibu Edited by Melissa Malamut
Key Takeaways
- FICO announced two new credit scores earlier this week that incorporate “buy now, pay later” histories.
- The scores, which will be available to lenders starting this fall, aim to give lenders a better idea of a person’s credit readiness.
Opting to "buy now, pay later" (BNPL) may soon affect your credit score.
FICO, the firm that determines credit scores used by 90% of the top U.S. lenders, announced on Monday that starting this fall, it will take the unprecedented step of incorporating BNPL histories into its credit scores.
FICO introduced two new credit scores that take BNPL into account: the FICO Score 10 BNPL and the FICO Score 10 T BNPL. It is the first credit scores from a leading provider to include BNPL data, and marks the first time FICO has launched scores to account for a type of loan.
Related: There Are New Rules for 'Buy Now, Pay Later' Programs — Here's What to Know
The two scores, will be offered side-by-side next to versions of the FICO score without BNPL at no additional fee, so that lenders will have a complete picture of a person's creditworthiness. FICO stated that the growth of BNPL loans led to its decision.
"Buy Now, Pay Later loans are playing an increasingly important role in consumers' financial lives," Julie May, vice president and general manager of B2B Scores at FICO, stated in a press release. "By expanding our FICO Score 10 Suite with new models designed to incorporate BNPL data, we're enabling lenders to more accurately evaluate credit readiness, especially for consumers whose first credit experience is through BNPL products."
Many BNPL loans are not reported to credit bureaus. Affirm, a BNPL provider that holds 35% of the U.S. market, only began reporting all new installment loans to the credit bureaus Experian and TransUnion in April.
Klarna, another BNPL company, only shares information with credit bureaus for longer-term, 24-month loans and does not share information about shorter-term loans like 'Pay in 4" installments.
FICO's move to include BNPL in two new credit scores arrives as the service grows in popularity. According to data from research firm Emarketer, BNPL transactions are expected to reach $108 billion this year, up from $94 billion last year. Capital One Shopping Research found that nearly 86.5 million U.S. shoppers used BNPL in 2024, up nearly 7% year-over-year, with an average loan size of $135. The loans cover everything from televisions to groceries.
Related: Klarna's CEO Used an AI Clone of Himself to Report Quarterly Earnings. Here's Why.
Individual BNPL providers are also reporting accelerated growth. Klarna's first quarter 2025 results last month showed that the company reached 100 million active customers in the quarter, a record-high and the fastest growth in two years. The U.S. accounted for 33% of Klarna's revenue growth in the quarter.
Meanwhile, Affirm's gross merchandise volume hit $8.6 billion in first-quarter earnings reported last month, an increase of 36% from the same period last year.
