Millions of Americans who split online purchases into four interest-free payments now face a new reality: those small installment loans can raise or lower their credit scores. Affirm reports every Pay-in-4 loan to TransUnion and Experian, and FICO has built a scoring model that treats buy-now-pay-later (BNPL) payment history much like traditional credit. A single late installment, even on a modest purchase, can cost borrowers points at a time when nearly one in four BNPL users missed a payment in 2024.
What is verified so far
FICO developed its BNPL-inclusive scoring model using a training sample of approximately 500,000 Affirm accounts, and lenders will have the option to adopt the model beginning this fall. The model does not replace existing FICO scores overnight. Instead, it will be offered as an additional option that lenders can choose to use alongside or in place of current versions. That distinction matters because adoption across the mortgage, auto, and credit card industries will take time, and not every lender will switch immediately.
The delinquency data behind this shift is striking. The Federal Reserve’s Survey of Household Economics and Decisionmaking found that nearly one-fourth of BNPL users were late making a payment in 2024. That figure represents a sharp increase from the prior survey cycle, which pegged the late-payment rate at 18 percent. The jump signals that a growing share of borrowers who relied on BNPL as a budgeting tool are struggling to keep up with even short-term obligations.
Not all BNPL providers furnish data to credit bureaus. Affirm is among the most aggressive in doing so, but competitors vary widely in their reporting practices. That patchwork means the new FICO model will capture some borrowers’ BNPL behavior while missing others entirely, creating an uneven playing field where two consumers with identical payment habits could receive different scores depending on which provider they used.
For consumers whose BNPL activity is reported, the stakes resemble those of a traditional credit card. On-time payments can help build a thicker file for people with limited credit histories, while missed installments may drag down scores for months or years. Because many BNPL purchases are small and frequent, even a brief period of financial stress could produce multiple delinquencies, amplifying the damage.
What remains uncertain
Several questions remain open. No public data yet shows how many lenders plan to adopt the BNPL-inclusive model once it becomes available this fall. Without adoption figures, it is difficult to gauge how quickly the change will affect real lending decisions such as mortgage approvals or credit card limit increases. FICO has signaled the rollout will be gradual, but the company has not published a timeline for broad industry uptake, leaving borrowers unsure when their BNPL habits will start to matter for major loans.
The competing delinquency figures from the Federal Reserve also deserve careful reading. The 2024 survey reported that nearly one-fourth of BNPL users were late, while the prior year’s survey placed the figure at 18 percent. Both numbers come from the same annual household survey but cover different reporting periods. Whether the increase reflects a genuine deterioration in borrower finances or a broader expansion of BNPL use among higher-risk consumers is not yet clear from the available data. Changes in how people understand and report BNPL use could also be playing a role.
It is equally uncertain how lenders will interpret BNPL information once they have it. Some may view responsible installment payments as a positive signal, especially for younger borrowers with thin files. Others may focus on the presence of any BNPL activity as a sign of cash-flow strain, particularly if it appears alongside high credit card balances or other indicators of stress. Until lenders disclose how they are weighting BNPL in underwriting models, consumers are left to guess how each installment plan might affect their broader financial profile.
Regulatory guidance could eventually shape those decisions, but policymakers have so far moved cautiously. The Federal Reserve’s surveys highlight rising late-payment rates, yet they do not prescribe how credit bureaus or lenders should respond. Consumer advocates are likely to press for guardrails to prevent small-dollar BNPL missteps from causing outsized harm, particularly for low-income households that turned to installment plans to cope with inflation.
For now, the most practical takeaway is that BNPL should be treated like any other form of credit. Borrowers who assume Pay-in-4 plans are consequence-free may be surprised to see their scores shift as reporting expands and lenders adopt new models. Setting calendar reminders for installment dates, limiting the number of concurrent plans, and reviewing credit reports to confirm how BNPL accounts are listed can help reduce the risk of unintended damage.
The evolution of BNPL scoring is still in its early stages. What is verified so far is that at least one major provider is feeding detailed data into the credit system and that a leading scoring company is preparing to use it. What remains uncertain is how quickly the rest of the industry will follow and whether the result will be a fairer picture of consumer risk or another source of confusion in already complex credit files.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
