Does Klarna, Affirm, and Other BNPL Services Affect Your Credit Score?
Over the last few years, Buy Now, Pay Later (BNPL) platforms like Klarna, Affirm, Afterpay, and Zip have exploded in popularity. These services promise instant purchasing power with little to no interest, typically split into 4 biweekly payments or stretched across a few months. But as consumers flock to BNPL for convenience, a bigger question looms: Do these platforms impact your credit score?
The answer? It depends.
Understanding the BNPL Model
BNPL services work like micro-loans at the point of sale. You choose a product, select BNPL at checkout, and agree to pay over time, often with no interest. Sounds like a win-win, but it’s important to understand what happens behind the scenes.
Some BNPL services perform a soft credit check when you apply (which doesn’t affect your score), while others, like Affirm, may perform a (hard inquiry) depending on the loan amount or terms — which can lower your score temporarily.
Historically, BNPL providers did not report repayment behavior to credit bureaus. That’s changing. Affirm now reports certain loans to Experian. Klarna began reporting UK customers’ data to credit bureaus in 2022, and U.S. reporting may follow.
If your BNPL provider reports to credit bureaus:
- On-time payments may help build credit (especially
for thin or no-credit borrowers).
- Missed payments could hurt your score just like missing a credit card or loan payment.If the account is sent to collections, it will have a major negative impact.
Why It Matters: Credit Utilization & Thin Files
Traditional credit scores like FICO are based on five factors: payment history, credit utilization, length of credit history, credit mix, and new credit. BNPL services, when reported, can affect at least three of these.
However, many BNPL loans aren’t factored into FICO or VantageScore calculations yet. That means you could be accumulating multiple short-term debts without the positive credit-building benefits — and with the risk of damaging your score if you fall behind.
Best Practices for BNPL Users
If you’re using BNPL services, here’s how to stay in control:
- Only buy what you can afford to repay. Don’t treat BNPL as “free money.”
- Monitor due dates. Set calendar reminders to avoid missed payments.
- Check if the provider reports to credit bureaus. If yes, treat it like a credit card or loan.
- Avoid stacking multiple BNPL loans. It’s easy to lose track and overextend yourself.
BNPL services like Klarna and Affirm offer speed and flexibility, but they aren’t risk-free. While some don’t affect your credit today, more are starting to report to credit agencies — making it possible for your behavior to help or hurt your credit score.
