TransUnion Becomes the Latest Bureau to Include Affirm’s Pay Over Time Products on its Reports

Those who use Buy Now, Pay Later (BNPL) products have historically been in a credit blind spot.

These short-term loans usually fly below the radar of major credit bureaus, so borrowers could rack up debt but never have it appear on their credit reports. That’s all about to change.

Affirm announced that it would start to report all of its Pay Over Time products to TransUnion, including its widely used “Pay in 4” loans. This is just weeks after it made a comparable agreement with Experian.

The decision is intended to reward consumers for responsible use of BNPL loans — and to provide lenders with better knowledge of borrower commitments.

The potential impacts go far beyond an individual company. With BNPL adoption on an upward swing and debt continuing to rise, this reporting could signal an era of new openness.

But for users who aren’t equipped for the new scrutiny, it could also mean trouble.

TransUnion’s own data from July 2024 reveals that 37% of BNPL customers had at least two active loans at one point in time, and skipped payments surged among younger consumers. Without visibility for those obligations, lenders were at risk of underestimating financial stress.

Affirm’s agreement with TransUnion will make its Pay Over Time products — short-term or longer installment loans alike — visible via TransUnion’s new BNPL-specific trade line structure.

As Affirm President Libor Michalek said in the company’s press release: “Affirm is committed to protecting and empowering consumers through our products and practices — from having no late or hidden fees to supporting positive credit outcomes through responsible lending.”

The increased demand for including BNPL data in consumer credit files means more than mere experimentation in the industry — it is a watershed in reporting on alternative credit.

The Upside for Credit Builders

For consumers with limited or no credit histories, making on-time BNPL payments regularly may now factor into establishing a credit record.

This is especially relevant to younger consumers or those with no ties to traditional banking institutions.

The Downside of Default

But the reporting cuts both ways. Missed payments on Affirm BNPL loans will also be reported, and may now directly affect credit scores.

That could prove especially dangerous for consumers who overextend themselves across multiple BNPL platforms without grasping the long-term impact.

TransUnion underscored that better data allows lenders to understand applicants more fully. That reduces risk and over-lending. 

Affirm also emphasized that its reporting process has safeguards, such as not reporting charged-off accounts until after a grace period, to reduce the likelihood of instant score damage.

Credit bureau companies have struggled for years to integrate BNPL data.

Conventional credit models were not built to manage short-term, installment-based BNPL. But with BNPL on pace to hit over $700 billion by 2026, models are quickly evolving.

Affirm’s follow-up with TransUnion doubles down on the trend of solidifying BNPL’s arrival as a legitimate credit segment. Consumers and lenders may just have to leave their invisible debt days behind.

Over the longer term, greater visibility in BNPL could lead to more responsible borrowing as individuals realize their repayment habits directly impact their credit records.

This could lead to better financial behavior as well as curtail overextension across platforms.

As credit bureaus adapt and regulators weigh their next steps, this shift could redefine how a generation of consumers interacts with credit.