Buy Now, Pay Later Borrowing and What it Means for Your Credit Score

TransUnion is including buy now, pay later data in credit reports to support people in managing their finances and to ensure payment behaviour on buy now, pay later agreements is visible.

TransUnion will be incorporating buy now, pay later data into traditional credit reports starting from summer 2022.

There will be no immediate effect on TransUnion credit scores. However, as the data becomes more widely used, TransUnion will be updating its credit scoring as appropriate.

People need as much choice as possible when it comes to finding finance that’s right for their needs, and on terms they can afford. Including buy now, pay later data in credit reports will support consumers and help lenders make informed credit decisions.

Providers will let customers know their data is being shared with TransUnion before it appears on their credit report and can confirm the dates it will apply from.

This will depend on the buy now, pay later provider, and they can let you know.

Providers can share this information with TransUnion as soon as they are ready. Many well known buy now, pay later companies are already working with us, ready for the data to appear on our credit reports this summer.

Payment behaviour will be visible to lenders, so it could be taken into account in lending decisions but won’t have an immediate effect on credit scores.

Credit scores won’t be impacted initially but missing payments would be visible to lenders and could affect your ability to borrow, so it’s really important to keep up repayments as agreed.

That will be up to the buy now, pay later provider.

This will depend on the provider and whether another search has recently been carried out. The product you’re applying for will also determine the search type.

Different credit reference agencies may have different approaches and timescales in terms of how they plan to incorporate buy now, pay later data. It will be up to individual finance providers to decide how they use buy now, pay later information in lending decisions.

Not at present, although the Financial Conduct Authority (FCA) is likely to introduce new rules for buy now, pay later providers in the near future. However, providers have been encouraged to start sharing this information as soon as possible to support financial inclusion and wider access to credit.

Buy now, pay later finance checks will be recorded on your TransUnion credit report, and will be visible to other lenders. However, these checks will be shown to lenders in a different way to traditional hard searches, typically used for things like mortgages, credit cards and loans, or soft searches, often used for quotations and eligibility checks before credit is provided. It will be up to individual finance providers to decide how they use these new checks in lending decisions.

If you haven’t yet seen your buy now, pay later agreements appear on your TransUnion credit report, don’t worry. Providers will let their customers know their data is being shared before it appears on their credit file and can confirm the dates it will apply from.

So, whilst it’s already started to appear for some, its availability will depend on each buy now, pay later provider, with more and more contributing information when they are ready.

• Different credit reference agencies may have different approaches and timescales in terms of how they plan to incorporate buy now, pay later data. It will be up to individual finance providers to decide how they use buy now, pay later information in lending decisions.