BNPL providers should proactively report customer credit data

For millions of Americans, buy now, pay later (BNPL) services have become an important tool for managing personal finances. These services allow consumers to make purchases with flexible repayment terms, often with very low or even zero interest. According toestimates, more than 90 million Americans use BNPL, and this growing number highlights consumers' desire for more transparent, lower-cost credit options.

However, a significant gap in credit reporting means that responsible BNPL usage is not being rewarded in the form of improved credit scores. Although responsible BNPL providers treat their products as loans, and BNPL has steadily gained popularity over the past decade, credit bureaus are still struggling to accurately reflect consumers' repayment histories in their credit files.

This is about to change. Affirm Holdings, one of the largest BNPL providers in the U.S., has announced partnerships withExperianandTransUnionto begin including consumers' BNPL repayment histories in credit reports. Other major BNPL providers continue torestrict their credit reporting, or not report at all, which hinders the industry's ability to use this data to help consumers. Not sharing this data means that all BNPL users are denied a more accurate and complete credit file that could record on-time payments and responsible BNPL usage.

As the BNPL industry continues to grow, all providers must commit to upholding the highest consumer standards, including sharing comprehensive, standardized data with credit bureaus. Only by ensuring that every consumer's repayment history is reflected can we achieve fair credit outcomes and enhance the inclusiveness of the financial system.

Although some companies worry about potential negative impacts on users' credit scores, BNPL providers should work closely with credit bureaus to ensure that scoring models can reflect the unique characteristics of BNPL and ultimately benefit consumers. Research released earlier this year by FICO and Affirmshowsthat including data on all of a consumer's BNPL loans in credit files can help improve scores. Strengthening credit reporting in the BNPL space will promote the shared interests of consumers, the industry, and the credit system that underpins our economy.

BNPL is changing the way consumers handle everyday expenses because it offers a modern alternative to traditional revolving credit. Responsible providers offer clear terms, predictable repayment schedules, and interest-free options, helping consumers budget more effectively. In the U.S., revolving credit card debt has reached$1.2 trillion, and BNPL offers a transparent way to manage cash flow, helping households avoid the hidden fees and compound interest traps in which many families find themselves mired.

However, our credit scoring models were designed in a different era, centered primarily on credit cards and long-term loans. These models fail to capture the short-term, installment nature of BNPL, leaving millions of consumers who pay on time without any credit benefit. This gap particularly harms young borrowers and thetens of millionsof Americans with thin or no credit history.

Updating the credit reporting system to reflect BNPL usage is a long-overdue modernization. Including this data will reward responsible repayment behavior, give lenders a more complete picture of borrowers' financial behavior, and bring more fairness to the credit system.

The path for the industry to address this issue is clear: providers should supply comprehensive, standardized BNPL data; credit bureaus and scoring companies should incorporate this data in ways that reflect the short-term structure of BNPL; and consumers should receive clear disclosures about how repayment behavior affects their credit.

Ultimately, incorporating BNPL into credit reporting is about building a system that reflects how people actually live, borrow, and spend today. By recognizing responsible BNPL use on par with traditional credit, we can build a financial system that supports inclusion, trust, and long-term consumer success. BNPL providers that share this goal should commit to reporting credit data so that consumers receive the credit recognition they deserve.