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Will a Buy Now, Pay Later (BNPL) loan impact my credit scores?

Generally, most Buy Now, Pay Later lenders don’t report your payment history to the major credit reporting companies, but your failure to repay may be reported by a debt collector.

Most BNPL products that let you pay off your loan in four interest-free payments don’t report to the major credit reporting companies. That means that your credit scores won’t be helped or hurt by your repayment behavior.

However, if you do not repay your BNPL loan and it is turned over to a debt collector, it could be reported to a credit reporting company and hurt your credit scores.

When you apply for a BNPL loan, the lenders generally don’t perform hard credit inquiries, which are the type of inquiries that can affect your credit scores.

Some types of installment loans that let you borrow larger amounts of money and pay back over longer periods of time do perform hard credit inquiries and do report payment history to the credit reporting companies. It’s important to read the details about the loan before applying and again before accepting the loan.

Learn how to increase your credit score.