Protocol
Currently, most “buy now, pay later” products can only hurt a user’s credit — if there’s even an impact on their credit score at all. But major BNPL companies, consumer advocates and credit bureaus all say they are trying to change that.
The effort began to gain steam in June, when the CFPB urged “pay-in-four” BNPL companies, credit bureaus and scoring companies to work together on incorporating BNPL data into users’ credit scores in a way that rewards responsible behavior. But BNPL companies say they are hesitant to trust credit bureaus with the data.
Most BNPL companies today do not report data from their 0% APR, pay-in-four credit products to credit bureaus — that is, unless a customer is delinquent on their payments and the debt is sold to collections. Some companies claim to not report delinquencies either. (Affirm, which offers a distinct, longer-term product, reports some loan data to Experian.)