BNPL Loans Now Count on Credit Reports – What It Means for Financing Your Next Used Car
💳 BNPL Loans Are Now Credit-Report Official - Here's What That Could Mean for You
If you've been enjoying the flexibility of Buy Now, Pay Later (BNPL) services like Affirm, Afterpay, or Klarna, you're not alone. More and more folks are using BNPL to spread out payments on everything from concert tickets to furniture. But here's what's new: those BNPL payments could soon show up on your credit report - and that could either help or hurt your chances when applying for a used car loan.
So… is this a good thing for car buyers? Let's break it down.
📈 What's Changing with Credit Reporting?
Until recently, most BNPL loans weren't reported to the major credit bureaus. That meant even if you were making every payment on time, it didn't necessarily help your credit score. On the flip side, if you missed payments, it didn't hurt either.
Starting in late 2025, new credit scoring models FICO Score 10 BNPL and FICO Score 10 T BNPL will be introduced to include BNPL data, provided BNPL companies decide to report it. Many are already planning to do so.
This change comes as part of a push to paint a fuller picture of your financial behavior. After all, if you're regularly managing multiple BNPL purchases and paying them off responsibly, it shows you're capable of handling credit. Your payment history is the biggest factor in determining your credit scores. For people you have taken on BNPL loans and are not paying them on time, we're likely to experience a significant drop in subset of the markets credit scores.
✅ The Upside for Used Car Buyers
Here's the good news for anyone thinking about financing a vehicle:
- You can build your credit with on-time BNPL payments, which could help bump up your score.
- Lenders get more info, and that can work in your favor if you don't have a long credit history.
- More people could qualify for better loan terms, especially younger buyers or those with "thin" credit files.
If you're planning to invest in a used car from a full service used car dealership like ours and your BNPL history shows responsibility, that could tip the scales in your favor when it comes to getting approved for a good auto loan offer.
⚠️ But There Are Some Risks to Know - The Downside?
f your BNPL payments aren't made on time - or if you take on too many at once - this could hurt your credit score. BNPL debt is often "invisible," and it's easy to overdo it when each purchase feels small. But collectively, they can add up quickly and look risky to lenders.
Here's some factors to keep in mind with BNPL programs:
- Missed payments will now likely be flagged on your credit report.
- Too many BNPL accounts in a short time could suggest overextension, which may raise red flags.
- Your credit utilization (how much debt you're carrying) could look higher.
The bottom line? If BNPL becomes part of your credit profile, those little payments, or worse yet-late payments could make a big difference in your ability to finance major purchases like a car loan at favorable terms.
🚘 How This Affects Your Next Car Loan
When you apply for a used car loan, lenders pull your credit report to help decide if they should make the loan and if so at what terms. These terms will include what interest rate they are willing to offer, how much they will loan and for how long a term.
BNPL data will add additional data to help the lender make that decision. If your credit score goes up thanks to responsible BNPL usage, you could qualify for lower rates or better terms. But if BNPL payments are missed or you're juggling too many, it might have the opposite effect, fueling the destruction of your credit rating.
If you're thinking about purchasing a used car and financing it in the next few months, now is the time to start managing your BNPL activity with care, just like you would a mortgage or credit card that all have been part of your credit score to date.
🔍 What You Can Do Right Now
Here's how to stay ahead of the game and be sure you are ready for the change:
- Check your credit reports regularly at AnnualCreditReport.com. It is free for Vermont residents to check once a year.
- Track your BNPL payments - use a spreadsheet, app, or reminders to stay on schedule, don't miss a payment.
- Don't open too many BNPL accounts at once.
- Talk to our financing team - we're here to help you understand what's on your credit file and how it might impact your auto loan options.
Tip: New to Credit? BNPL Can Help You Build It
If you have little or no credit history, BNPL loans could now be a smart way to start building credit - as long as you use them wisely. Since BNPL approval standards are typically more flexible than credit cards, it's easier to get started.
Now that on-time BNPL payments may show up on your credit report, managing them responsibly can help you build a solid credit score and improve your chances of qualifying for a used car loan.
💡 What This Means for You as a Shopper
Adding BNPL to credit reports is a big shift - and like many credit changes, it can either help or hurt depending on how you use it. For used car buyers, it could open doors to better financing… or add unexpected bumps in the road if BNPL payments get out of hand.
In fact, a new LendingTree report found that over 40% of BNPL users have made late payments - that's a 34% increase over last year. And 25% of BNPL users now use these loans for everyday necessities like groceries, up from just 14% the year before. That tells us a lot: people may be relying on BNPL more than they realize - and that can impact credit scores in ways they didn't expect.
At Upper Valley Auto Mart, we understand that every buyer's financial journey looks different. Whether your credit is strong or still recovering, our team is here to help you explore used car financing options with no judgment. If you're not sure how your BNPL history might show up on your credit report, let's talk through it together. We'll help you make sense of it all and get you on the road in a vehicle that fits your budget and lifestyle.
 |
Search our inventory. Choose your next vehicle and schedule your test drive online.
Published July 14, 2025
