Buy Now, Pay Later Will Now Impact Your FICO Score

Buy now, pay later (BNPL) loans have become the go-to option for financing everything from burritos to Coachella tickets, with more than 20% of consumers using these microloans. Since they’re a new financial product, BNPL loans haven’t been factored into your credit score…until now. Starting in fall 2025, FICO will begin examining your BNPL loans when determining your credit score. 

Here’s what that means for your money 👇

Table of contents

• What is buy now, pay later (BNPL)?  🤔

• Does BNPL affect my credit score? 

• Why is a FICO score important?

• Protecting your credit score 

What is buy now, pay later (BNPL)?  🤔

Buy now, pay later companies offer installment loans that allow you to pay for purchases over time, instead of upfront. Think: splitting a $90 hoodie up into 4 bi-weekly payments of $22.50.

BNPL loans are popular for 2 main reasons:

1. They don’t charge interest: BNPL loans are usually interest-free, as long as you pay within the required time frame. 

2. They’re convenient: Most BNPL providers offer loans right at checkout, making it easy to finance big purchases.

👉 The Pros and Cons of BNPL Services

Does BNPL affect my credit score? 

Yes, FICO is launching two new scores that will incorporate your BNPL data: FICO® Score 10 BNPL and FICO® Score 10 T BNPL. Both scores are expected to launch in fall 2025 and will include your BNPL loan data over a given time frame. So what does that mean for your finances?

Mainly that the size of your outstanding BNPL loans, your BNPL payment history, and other factors will start to impact your score:

• This could improve your FICO score if: You consistently make on-time payments to your BNPL loans, or have already paid off a few BNPL loans in full.

• This could hurt your FICO score if: You have ever fallen behind on payments or have outstanding loans left to repay.

Payment history is just one factor used to determine your FICO score, though. 

👉 How are Credit Scores Calculated 

Why is a FICO score important?

A FICO score is important because it helps you get approved and secure good terms for loans and other forms of credit. Having a good FICO score can sometimes be the difference between getting approved or rejected for a mortgage, car loan, or credit card.

Your FICO score is a bit like your financial GPA. It quickly tells lenders how trustworthy of a borrower you are. The higher the score, the better. 

A higher credit score typically means you’re more likely to get approved for credit with better terms, like a car loan with a 6% interest rate, instead of 8%. Or a credit card with a $5,000 limit instead of $1,000. 

👉 How to Improve Your Credit Score in 3 Months

A “good” FICO score varies based on your age. Older people tend to have higher credit scores because they’ve had more time to earn money, pay bills, and build up a credit history. Younger people tend to have lower scores because they usually don’t have as much financial experience. 

Here’s a breakdown of the average credit score by age:

👉 What’s a Good Credit Score for My Age?

Protecting your credit score 

If you’re an avid BNPLer, don’t worry…the fact that these loans will now impact your credit score doesn’t mean that you have to stop using them. BNPL services can still be a valuable way to get interest-free financing. You just want to be extra careful that you’re using them responsibly now that they can influence your credit score. 

Here are 3 ways to BNPL responsibly:

1. Do your best to never miss a payment: Missing a payment on your loans is one of the quickest ways to ding your credit, even if that missed payment was only $10. Setting up autopay or a calendar alert can help you remember when payments are due and avoid forgetting about them.

2. Avoid overextending your budget: BNPL loans make it seem like you’re spending less money than you really are, making it easy to overspend. If you find yourself saying “I’ll figure it out later” as you hit Buy, then you might want to pump the brakes and reconsider that purchase.

3. Explore alternative payment options: BNPL loans are super convenient, but they’re not the only way to pay for things. Learn 5 alternatives to buy now, pay later loans. 

Bottom line? Buy now, pay later loans are no longer flying under the credit radar. 

Starting fall 2025, those microloans could boost or bruise your FICO score. So think twice before you split up your next purchase: your credit future might be riding on those payments.