{"id":1554288,"date":"2025-07-02T07:51:07","date_gmt":"2025-07-02T11:51:07","guid":{"rendered":"https:\/\/www.practicalecommerce.com\/?p=1554288"},"modified":"2025-07-02T07:51:39","modified_gmt":"2025-07-02T11:51:39","slug":"bnpl-loans-to-impact-credit-scores","status":"publish","type":"post","link":"https:\/\/www.practicalecommerce.com\/bnpl-loans-to-impact-credit-scores","title":{"rendered":"BNPL Loans to Impact Credit Scores"},"content":{"rendered":"

The Fair Issac Corporation, better known as FICO, is launching new credit scores that incorporate buy-now-pay-later loans, potentially influencing the behavior of consumers, providers, and merchants.<\/p>\n

The shift could impact ecommerce conversion rates, average order values, and repeat purchases if consumers reconsider how they use BNPL services or become ineligible.<\/p>\n

Some BNPL providers already report repayment data, but the new FICO score models <\/a>represent the first standardized effort to incorporate BNPL loans into mainstream credit scoring.<\/p>\n

For ecommerce merchants, the change could highlight a need to monitor how shoppers pay and may introduce uncertainty at checkout.<\/p>\n

\"FICO

FICO’s new BNPL credit scoring could impact merchant revenue.<\/p><\/div>\n

Why It Matters<\/h3>\n

FICO’s decision to include BNPL data addresses lender demand for better visibility into repayment behavior and the widespread use of BNPL loans.<\/p>\n

Specifically, a joint FICO and Affirm study “confirmed that a unique consumer behavior associated with BNPL loans is the potential for a large number of these loans to be opened within a short period.”<\/p>\n

For FICO’s primary customers (financial institutions), consumers who take out multiple BNPL loans are a higher risk.<\/p>\n

Critics argue that traditional scoring models, such as FICO’s, do not reflect the realities of modern consumer finance. The FICO score and similar ratings fail to consider new forms of financial behavior, including:<\/p>\n