Overview

• FICO has rolled out two new scoring models—FICO Score 10 BNPL and FICO Score 10 T BNPL—that for the first time factor in consumers’ buy now, pay later repayment records
• Borrowers with limited or no traditional credit history who have managed BNPL plans responsibly stand to see their credit scores improve under the new models
• Rising defaults on BNPL loans, including Klarna’s loss rate increase from 0.51% to 0.54%, highlight the growing importance of tracking these installment payments
• Credit analysts warn that widespread adoption may be gradual since many lenders continue to use older FICO versions and must update reporting systems
• Regulators in the US, UK and Australia are moving forward with measures to bring BNPL services under consumer protection frameworks and increase transparency