July 23, 2025
FICO announced it will begin factoring Buy Now, Pay Later (BNPL) loans into scoring models.
FICO, the creator of America’s most widely used credit-score system, will begin factoring Buy Now, Pay Later (BNPL) loans into select credit-scoring models later this year.
The company released a statement explaining its decision and the benefits to consumers. The change “acknowledges the evolving landscape of consumer financing.” BNPL has become increasingly popular, particularly among younger Americans and limited credit consumers. While intended to help, the change may hinder consumers who cannot keep up with payments.
FICO’s new scoring methods will group BNPL data but not penalize consumers opening multiple short-term loans. The models, FICO Score 10 BNPL and 10T BNPL, will group the short-term BNPL loans together.
FICO vice president Julie May said this shift could help financially underserved groups. Most notably younger borrowers or those lacking traditional credit history can improve their credit scores.
“Buy Now, Pay Later loans are playing an increasingly important role in consumers’ financial lives,” said May. “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. This innovation also supports our mission to expand financial inclusion by helping more consumers gain access to credit.”
The move comes after BNPL company Affirm began reporting to major credit bureaus Experian and TransUnion on April 1.
Early findings from a FICO-Affirm study suggest more than 85% of users’ credit scores benefit as a result of the calculations. Many consumers maintain or even boost their scores when making on-time BNPL payments.
Conversely, consumers who miss BNPL payments or take on multiple plans are sometimes hindered in the quest to build a positive credit rating. A Reuters analysis noted growing late-payment trends and fears of “loan stacking,” which can adversely influence lending decisions.
Some financial institutions are now flagging BNPL usage. Companies deem the usage risky. Major banks like JPMorgan Chase and Capital One have restricted using credit cards to pay BNPL loans regardless of a positive repayment history.
With BNPL accounting for an estimated $108 billion in U.S. transactions this year, lenders will now have clearer insight into consumer debt profiles.
As FICO’s BNPL-inclusive models roll out in the fall, consumer advocates warn that on-time repayment is critical.
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