More Buy Now, Pay Later (BNPL) loans will start reporting to Experian, Equifax, and TransUnion in 2022

As the popularity of Buy Now, Pay Later (BNPL) continues to grow, the three major credit bureaus (Experian, Equifax, and TransUnion) want to see these accounts reported to consumers’ accounts so that lenders can see a more complete picture of consumers’ credit history.



Buy Now, Pay Later loans are short-term installment loans, usually due within one to two months. Two attractive features of the loans include the common practice of not requiring a hard credit check to obtain the loan, and the offering payment plans with low or no interest charges. 



Millions of consumers’ Experian credit reports already reflect BNPL accounts. The bureau has been working with major Buy Now, Pay Later providers since 2016 and plans to report more BNPL accounts from other providers in 2022.



TransUnion is also working with BNPL providers to get account data reflected on TransUnion credit reports. 



While TransUnion feels that current technology can’t support reporting of BNPL data, Equifax has taken the lead to provide what they feel are reporting standards needed to make regular reporting of Buy Now, Pay Later accounts feasible. They’ve tested their service with live consumer accounts since August of 2021 and plan to officially start reporting BNPL accounts beginning in February 2022. 



The bureaus all agree that while some consumers may experience score increases because of the addition of the Buy Now, Pay Later accounts, some consumers’ scores may drop. Someone with a poor or little credit history may benefit by having their positive payment history reported. However, opening accounts typically results in a score decrease.



According to The Ascent’s 2020 survey of 2,000 Americans, over 72% of Buy Now, Pay Later customers used BNPL services more than once every six months. For Ascent’s 2021 survey, that number increased to over 75%.



According to Insider Intelligence, almost 25 million people used Buy Now, Pay Later plans in 2020, and over 45 million were expected to use them in 2021. It’s unclear if these figures represent 25 million individuals or 25 million BNPL accounts. But, it’s apparent that the upcoming Buy Now, Pay Later credit reporting policies will affect both consumers and the BNPL loan providers. It’s possible that the trend in BNPL programs experiences a downtrend if consumers buck the loans due to negative effects on credit history.


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