Written by: Eric Bank
Edited by: Lillian Guevara-Castro
Reviewed by: Adam West
Key Takeaways
- Affirm will begin reporting Pay in 4 BNPL loans to Experian late April 2025, a move that represents a major shift in how short-term installment debt is tracked.
- The change could help consumers with thin or poor credit build their profiles—but also exposes them to new risks if payments aren't made.
- Regulatory uncertainty under the new Trump administration may impact how quickly or how widely these reporting practices propagate.
Buy Now, Pay Later (BNPL) has grown in popularity over the past few years, especially with younger shoppers and those who want to avoid traditional credit cards. In fact, more than half of U.S. adults used a BNPL service in 2023, with spending surpassing $80 billion.
But for all its convenience, BNPL has had one significant Achilles’ heel: Most plans won’t show up on consumer credit reports. That may be about to change.
Affirm, one of the biggest BNPL players, recently made a deal with Experian that could alter how Pay in 4 loans are handled in borrowers’ credit reports.
Starting in April 2025, Affirm will begin reporting those short-term installment plans to Experian, which will give lenders and credit bureaus a more complete view of a consumer’s financial behaviors.
It’s a big step and one that will have advantages as well as possible risks for those who use BNPL to stretch their budgets.
Shining a Light on BNPL
Until now, Pay in 4 plans and other BNPL products have largely flown under the radar. They typically don’t require credit checks, don’t charge interest (if paid on time), and, most importantly, don’t report to the credit bureaus.
That’s been a double-edged sword. On the one hand, consumers don’t take a credit score hit if they’re late with a payment. On the other hand, they don’t build credit with on-time payments.
That will change with the new Affirm-Experian partnership. By reporting Pay in 4 loans, Affirm is bringing transparency to a segment of consumer debt that has grown exponentially in recent years.
Experian will house the information in a separate part of its credit reports from traditional credit lines.
Lenders will be able to see this activity, but it will not impact credit scores automatically—at least, not right away.
It’s also worth noting that this applies only to Affirm’s Pay in 4 product, not all its longer-term loans, and how negative behavior will be reported is still being clarified.
Why This Is Important, Especially to Individuals with Less-than-Perfect Credit
If a borrower has a thin credit file or a few blemishes in their history, this could be a fresh opportunity to show lenders they are managing money responsibly. On-time BNPL payments could help flesh out the picture of how borrowers are behaving.
Yet, it cuts both ways. If a consumer misses payments or overuses BNPL products, that activity can come back to bite them. For those who are already juggling multiple debts, adding yet another payment—a small one, maybe—can tip the scales in the wrong direction.
“Greater transparency in buy now, pay later activity is key to helping consumers build their credit histories and supporting responsible lending.” — Scott Brown, Group President, Financial Services, Experian North America
Now that the data is out in the world, lenders may begin using it when deciding whether to approve a borrower’s application.
In short, BNPL is growing up. And that means consumers need to treat it more like a real loan because that’s exactly what it is.
The Regulatory Wildcard
The shift from Biden to Trump could change how BNPL products like Affirm’s are regulated. The Biden administration pushed for increased oversight, including proposals to treat BNPL like traditional credit cards.
But with President Donald Trump back in office, pending regulations are now paused while the new administration reevaluates its stance.
That pause might delay—or even derail—parts of the Affirm-Experian rollout, depending on how the policy winds blow.
Looking Ahead: What Comes Next?
Other BNPL competitors like Afterpay and Klarna may soon follow suit. That begs the question of how credit-scoring models like FICO and VantageScore will incorporate this new data. Will they start incorporating BNPL activity? If so, how? As of now, that remains unclear.
One thing is for sure: Consumers need to be educated. If BNPL usage is going to show up on credit reports, people need to understand what that will do to their overall financial health. This shift may enable some borrowers to build credit—but it could also dig a deeper hole for others.
Affirm’s agreement with Experian is a turning point for Buy Now, Pay Later. It brings more visibility to a fast-growing segment of consumer finance but also raises the stakes for those who use these products.
For people with thin or imperfect credit, this could turn out to be a useful tool—or a wolf in sheep’s clothing. Either way, it’s time to take BNPL seriously — because now, lenders will.
