Introduction

The rise of Buy-Now-Pay-Later (BNPL) loans has been meteoric—growing into a mainstream credit tool, especially among younger consumers. In a pivotal move, FICO announced that it will begin incorporating BNPL data into its credit scoring models in fall 2025. This shift opens new pathways for score improvement—but also introduces fresh challenges for borrowers and financial advisors alike. The GuardianThe Washington Post

What’s Changing: BNPL Meets FICO Scoring

• What’s going in? BNPL loan behavior—especially responsible usage—will now be factored into FICO models such as FICO 10T and FICO 10, capturing “phantom debt” previously invisible in traditional data streams. The Washington Post

   

• Timeline: The updated scoring models go live in fall 2025, though lender adoption may vary and evolve over time. The GuardianThe Washington Post

   

• Why it matters: BNPL has rapidly become a popular method for financing retail purchases, and including it in credit reports introduces a more holistic view of consumer credit behavior. The Wall Street JournalAxiosThe Washington Post

   

Why Consumers Should Care

• Boost for Responsible Borrowers: Those with consistent BNPL payments may see modest score improvements or avoid penalties. The GuardianThe Washington Post

   

• Risks for High-Use or Delinquent Borrowers: Consumers with inconsistent BNPL repayment histories—or those who rely heavily on BNPL—could face adverse effects. The GuardianThe Washington Post

   

• Current vs. Future Impact: While Affirm reports BNPL data to Experian now, wider effects depend on all major bureaus integrating BNPL data and lenders adopting FICO’s new models. AxiosThe Washington Post

   

What Financial Advisors Should Know

• Reframe BNPL as a Credit Tool: Navigate clients toward responsible BNPL use: timely repayments and moderated usage can enhance scores.

   

• Educate, Don’t Panic: Clients worried about credit impact need guidance on balancing BNPL convenience with long-term credit planning.

   

• Be Ready for Transition: As lenders adopt the new scoring models, advisors should stay informed and adjust strategies accordingly.

   

• Monitor Equifax, Experian, TransUnion Integrations: Data inclusion varies—tracking announcements from each bureau will inform client advice.

   

Broader Outlook & Market Implications

• BNPL Growth Is Explosive: With the sector approaching $100 billion in annual usage, this shift reflects its growing financial significance. The Wall Street Journal

   

• Evolving Credit Landscape: Creditors and scoring systems are adapting—incorporating behavioral and alternative data shifts how creditworthiness is assessed. The Washington PostThe Wall Street Journal

   

• Call for Fair Reporting: Providers like Klarna and Afterpay remain cautious about reporting until fair-credit frameworks emerge. The Wall Street Journal

   

How Consumers Can Prepare

1. Track BNPL Accounts: Know which providers report to credit bureaus (e.g. Affirm).

    

2. Use BNPL Strategically: For essentials and predictable expenses, with timely repayment.

    

3. Limit Overuse: Too many BNPL loans may signal dependency and risk.

    

4. Check Credit Reports Regularly: Watch for BNPL entries and their impact.

    

5. Seek Advisor Support: Tailored strategies become critical as the scoring landscape evolves.

    

Conclusion

FICO’s decision to integrate BNPL data into credit scoring marks a milestone in consumer finance—offering responsible BNPL users a pathway to improve credit standing but also requiring careful management to avoid pitfalls. For CreditNuvo readers and clients, understanding this change allows for more informed, strategic financial behaviors.