Starting this fall, buy now, pay later (BNPL) loans — the fast, flexible way to split up purchases over time — will be added to the credit scoring models used by FICO, the system that determines your credit score. For many consumers, this is just another tweak to a complex system. But for Black Americans, who have long faced unequal access to fair credit, this shift could be a financial turning point — or a trap.
The update means BNPL activity — your repayment habits, how often you use it, and whether you miss payments — will now influence your credit score, the three-digit number that controls everything from your ability to get a car loan to your chances of renting an apartment.
The big question: will this help or hurt?
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The Rise of BNPL
Buy now, pay later services like Klarna, Affirm, Afterpay, and Sezzle exploded during the pandemic. With millions of people unemployed or underemployed, and traditional credit harder to access, BNPL gave consumers a way to manage urgent needs without the hurdle of a credit check.
Black consumers — who are more likely to be denied for credit cards or loans and more likely to face higher interest rates when approved — turned to BNPL out of necessity and convenience.
According to data from the Consumer Financial Protection Bureau, a significant portion of BNPL users have subprime credit scores. And Black borrowers are disproportionately represented in that group, meaning many may now see their BNPL habits reflected on their credit reports for the first time ever.
The Credit Catch: Why This Change Matters
Up until now, BNPL loans existed in a kind of credit limbo. You could rack up loans, pay on time, miss payments, and none of it would show up on your credit score. That’s about to change.
FICO says it made the update to reflect “the increasingly important role BNPL plays in consumer finances.” But with that recognition comes consequences.
If you pay on time, you may see a boost in your score, especially if you don’t have much of a credit history.
If you miss payments or stack too many BNPL loans, your credit could take a hit, just like it would if you missed a credit card or loan payment.
And once that happens, it becomes harder to get approved for credit cards, auto loans, mortgages, or even some jobs.
“If you’re using buy now, pay later responsibly, I would argue [the change] should help you as a stepping stone to improve your credit, and maybe it helps you get your first credit card or car loan,” Ted Rossman, an analyst at Bankrate, says.
Black Communities and Credit Inequality
This change lands in a credit landscape that has historically failed Black consumers. Due to redlining, wage gaps, predatory lending, and systemic discrimination, Black Americans are more likely to:
- Have no credit or “thin” credit files
- Be denied credit or offered worse terms
- Have student debt and other obligations that make credit harder to manage
That means tools like BNPL have been both a workaround and a risk.
Fumiko Hayashi, an economist at the Federal Reserve Bank of Kansas City, notes that BNPL usage skyrocketed as people shifted to online shopping and faced economic downturns during the pandemic. BNPL gave many Black consumers a way to access essentials without taking on high-interest credit.
But it also created new traps. In 2024, 24 percent of BNPL users missed a payment. Among people earning less than $25,000 per year, that number jumped to 40 percent.
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What Consumers Should Do Now: 6 Steps to Protect Your Credit
1. Don’t Let BNPL Be “Invisible Debt”
It’s easy to think BNPL is harmless. After all, there’s no interest, no credit check, no scary statements in the mail. But if you’re juggling multiple BNPL loans across different platforms, it adds up fast, and now the credit bureaus are watching.
2. Pay On Time, Every Time
This is non-negotiable. A missed payment could drag down your score, even if it’s just a $20 installment. Set auto-pay reminders or link BNPL to a card with sufficient balance.
3. Limit Your BNPL Usage
Don’t open more BNPL loans than you can manage at once. Even if they seem small, they affect your overall credit picture. Too many can make you look overextended.
4. Combine BNPL With Traditional Credit-Building Tools
Don’t rely only on BNPL. Get a secured credit card, become an authorized user on someone else’s account, or look into credit-builder loans. These help you diversify your credit history.
5. Review Your Credit Report Regularly
Start pulling your credit reports for free at AnnualCreditReport.com. Look for any new BNPL activity, errors, or sudden score changes.
6. Know the Financial Psychology
BNPL can make spending feel painless — but that’s the danger. You may think you’re only paying $30 today, but by the time you split five different purchases, your next paycheck is already spent. Be intentional, not impulsive.
Real Talk: Will This Hurt or Help?
That depends on how you use it. The good news is that FICO’s study of 500,000 consumers found that most saw either no change or a credit score increase when BNPL data was added.
But there’s still risk, especially for lower-income users or those who rely on BNPL for everyday expenses. The Harvard Business School found that BNPL use reduces how sensitive people are to their income — in other words, you may keep spending even when you can’t afford to.
Becca, a 26-year-old tech worker in New York, summed it up perfectly to the Guardian: “It’s just encouraging poor spending behavior from young people. “All these items build up because you’re using it again and again and again. You don’t feel like you’re spending a lot of money.”
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Timing: Will This Happen Right Away?
Not quite. While the new FICO model will be released this fall, many lenders still use outdated scoring models — some over a decade old. So it may be months or years before all banks and credit card issuers begin factoring in BNPL data.
But that doesn’t mean you should wait to get ready. Once BNPL hits your report, you want it helping you, not haunting you.
Final Thoughts: Take Control Before It Takes Control of You
Credit scoring already works against Black Americans in countless ways. This new update isn’t a fix, but it’s an opportunity to shift the balance. If you’re thoughtful, strategic, and consistent, BNPL can be part of a smarter credit journey.
But if you’re casual or careless, it’ll show — and the costs could follow you for years.
