Do BNPL Options Like Afterpay Affect Your Credit Score
Rohini May 7, 2024

Do BNPL Options Like Afterpay Affect Your Credit Score?

◾ Afterpay and other buy now pay later (BNPL) options offer a convenient solution for handling immediate expenses, but understanding its impact on credit and adopting responsible financial practices are essential. 
◾ While Afterpay doesn't directly affect credit scores, its usage can indirectly influence credit utilization.
◾ Leveraging tools like CoolCredit can help individuals navigate BNPL responsibly, providing insights and strategies for optimizing credit health.

When urgent needs arise and finances are tight, buy now, pay later (BNPL) becomes a convenient choice. Imagine your phone breaks, or your child needs medical care, but payday is still far away. BNPL steps in and lets you immediately get what you need and pay for it in installments. It's a modern twist on buying things on credit, making it easier to handle unexpected expenses without causing financial strain.

Learn more about BNPL and how it affects your credit score.

Did You Know?

GrandViewResearch projects that the BNPL market size will experience a compound annual growth rate (CAGR) of 24.3% between 2023 and 2030.

What Is BNPL? 

BNPL is like a quick loan. It lets you buy something on credit, meaning you can pay for it later. There's no extra charge if you pay on time, and they don't check your credit history. It works a bit like a credit card, but without adding extra interest.

How Does “BNPL” Work?

"BNPL" stands for "Buy Now, Pay Later." It works like this: you can buy something and split the cost into smaller payments over time, without extra charges or interest. You know exactly how much you'll pay upfront and depending on the terms and conditions agreed upon, the amount will be deducted from your credit card.

Does Afterpay Affect Credit? Does other BNPL Affect Credit?

It depends on the BNPL service you choose. Most buy now, pay later plans check your credit report via a soft inquiry. Some may conduct a hard inquiry, knocking your credit score a few points. Thus, these plans won't affect your credit report or score if they conduct a soft inquiry. Beware, each BNPL plan is different, and checking their terms before agreeing is advised. 

Some buy now, pay later (BNPL) services don't tell consumer reporting agencies about your payments. Or they might only tell a few of these agencies. But how BNPL payments get reported is still being worked out.

For instance, you use Klarna to buy a new phone. If you make your payments on time, Klarna might not tell any consumer reporting agencies about it. But if you miss payments, they might let a few agencies know about it. So, it's important to keep track of how your BNPL payments might affect your credit.

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Does Credit Change Depend on Buy Now, Pay Later Platforms?

Can buy now, pay later services boost your credit? It depends on the provider! Some BNPL companies might not tell credit bureaus when you pay on time, but they will tell them if you're late with payments.

Here are some BNPL service providers:

  1. Afterpay: Afterpay allows you to split your purchase into four payments over six weeks, with no interest. They charge a late fee if you miss a payment.
  1. Affirm: Affirm offers a 4-installment loan without annual or late payment fees. The credit limit is based on your credit score. You can use Affirm online or in-person at many retailers.
  1. Klarna: Klarna also offers four interest-free payments based on your credit score. You can use it in person or online at any store. 

4. Sezzle: Sezzle lets you split purchases into four payments, with the first due at purchase and the rest every two weeks. They don't charge interest or fees as long as you pay on time.

Let's talk about Afterpay, a popular BNPL service. With Afterpay, your payment history isn't shared with credit bureaus. So, whether you pay on time or not, it won't impact your credit score. Affirm, however, does tell Experian about your payments.

Here are some popular BNPL options and a comparison chart that details whether they report to credit agencies.

BNPL ProviderNo. of PaymentsDoes Payment Info Get Reported to Credit Bureaus?
AffirmOnce every fortnightYes
AfterpayOnce every fortnightNo
KlarnaOnce every fortnightIf you default a payment
SezzleOnce every fortnightYes

The Upsides and Downsides of Using Afterpay

Considering BNPL for your purchases? It's essential to weigh both the benefits and drawbacks before signing up. Let's look at them so that you can make an informed decision.


  1. Interest-Free Purchase: BNPL allows a consumer to purchase without paying the entire amount upfront. This feature allows you to make big purchases without burning a hole in your pocket.
  2. Easy Sign-Up: Most BNPL services are simple to use and make it easy to buy things without filling out long forms.
  3. Simple Payment Plan: Sticking to a payment plan can often pose a challenge. Isn't it? So, BNPL has simplified the process by dividing your total bill into equal installments. You must ensure you have enough money to pay the installment or you’ll be charged a late fee.


  1. Causes Overspending: Interest-free installments can create a situation where it's easy to spend more than you planned. Since you're not paying any interest, it might feel like you can afford to buy more than you normally would. This can lead to overspending if you're not careful.
  2. Late Payment Charges: The concept is clear - pay on time and there are no late payment charges. However, if you miss a payment, you’ll be levied with late payment charges, and worse, it may affect your credit score negatively.
  3. No Choice in Payment Dates: Not being able to choose your payment date can lead to problems. Additionally, your bank might charge you overdraft fees in case of insufficient funds.
  4. No Reward Points or Cash Back: Some BNPL services don’t offer any reward points as is the case with credit cards.
  5. Faulty Terms of Payback: Some BNPL services require you to pay the balance within six months, while others offer longer time. Checking the terms and conditions before agreeing to them is advised.
Bankrate reports, that nearly 45% of people use BNPL because they find it easier to make payments.

CoolCredit: Credit Repair Made Easy, Anytime, Anywhere

If BNPL is driving you up the wall and affecting your credit score, it’s time to take control of your credit. Use CoolCredit - a smart AI-powered & DIY credit repair app that helps you manage your credit score in the most efficient manner. With CoolCredit, you can:

  1. Receive detailed insights on your credit report and suggestions for improvement.
  2. Get expert assistance to strategically navigate your credit repair journey.
  3. Access ready-to-use dispute letters to simplify the process of addressing and fixing errors on your credit report.
  4. Benefit from comprehensive credit monitoring to keep you informed and vigilant around the clock.

CoolCredit's comprehensive ai credit repair tool empower users to navigate the complexities of credit repair with confidence.

5 Top Tips to Build Better Credit

Whether you're aiming to boost your credit score or maintain a healthy credit profile, these tips are essential for achieving your goals.

  1. Timely Payments: Never miss a payment, as it accounts for 35% of your credit score. It is one of the best strategies for avoiding bad credit. 
  1. Use Credit Cards Wisely: Using a credit card wisely is essential or it can lead to debt. Make sure to pay the full amount you owe on your credit card each month to avoid paying any extra money in interest.
  1. Be an Authorized User: By becoming an authorized user, you can leverage the good credit history of the main account holder. 
  1. Review Your Credit Reports: With the help of the CoolCredit repair app get detailed insights into your credit report and stay updated.
  1. Avoid Exceeding Your Credit Limit: One of the important factors for measuring your creditworthiness is the ratio of available credit compared to the total credit limit. 

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Afterpay or BNPL presents a convenient solution for managing urgent expenses while offering flexibility through their pay-later model. However, it's essential to understand its implications, especially regarding credit management. Despite Afterpay not directly affecting credit scores, its usage can indirectly influence credit utilization and spending habits, posing potential risks if not managed responsibly.

To navigate these challenges and optimize your credit scores, consider leveraging tools like CoolCredit, a reliable credit repair app. CoolCredit provides comprehensive insights into your credit report, offering personalized strategies for improvement and access to dispute letters for error rectification. By staying informed and proactive with tools like CoolCredit, you can mitigate risks associated with Afterpay usage and build a stronger financial foundation.


Q: How Does BNPL Affect Your Credit Score?

A: A missed payment will indirectly affect your credit score. But, consider making payment on time to avoid this. Let's explore how BNPL indirectly affects your credit score:

  1. Credit usage: When you spend money with BNPL, it affects how much credit you're using compared to what you can borrow. If you spend too much, it can hurt your credit history.
  2. Credit mix: Having different types of credit, like credit cards, loans for a house, and Afterpay, can help your credit score get better.

Q: Does Afterpay Usage Affect My Credit Score?

A: The answer is not straight forward. It mostly hinges on the your financial behavior. Untimely and excessively delayed payments will most likely cause some companies to take action on it. In entirety, whether Afterpay usage affect your credit score or not, it’s hard to say.

Q: Will Running a Soft Inquiry Affect My Credit Score? 

A: No, a soft check won't affect your credit score.

Q: How Long Does it Take to Build Credit?

A: It takes around three to six months before you'll see your initial credit score. But, it's different for everyone. Building credit depends on how well you manage your debt. 

Q: Does Afterpay Build Credit?

A: No, Afterpay doesn’t build credit because it does not report your payments to any of the three credit bureaus.

Q: Is Your Credit History Checked By Afterpay?

A: A soft credit check is undertaken by Afterpay services when a new customer signs up and soft queries do not hurt or affect your credit score. 

Q: What About Charging Interest?

A: As long as you make payments on time, nothing is charged. Most Afterpay services charge a late fee if a consumer defaults on payment.

Q: I Missed a Payment. What Next?

A: If you miss a payment, a late fee is charged. Your account is temporarily paused and you can’t make any further purchases till you fix the problem i.e., make a payment.

Disclaimer: The information provided belongs to CoolCredit. CoolCredit does not endorse or support any Buy Now, Pay Later (BNPL) models and is not affiliated with them in any way.

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