FICO's announcement to include buy-now-pay-later (BNPL) data in credit scores has ignited a heated discussion about whether this change will help or harm consumers. With over 90 million Americans expected to use BNPL services in 2025, the move addresses a growing gap in traditional credit assessment. However, the community response reveals deep concerns about the broader implications of this shift.
FICO BNPL Integration Timeline & Statistics
| Metric | Value |
|---|---|
| Expected BNPL users in 2025 | 90+ million Americans |
| Late payment rate 2024 | 24% of BNPL users |
| Late payment rate 2023 | 18% of BNPL users |
| New FICO score versions | FICO Score 10 BNPL, FICO Score 10 T BNPL |
Key Changes:
- First time BNPL data included in FICO scores
- Affirm began reporting to Experian earlier in 2025
- Previously considered "phantom debt" now visible to lenders
The Hidden Debt Problem Comes to Light
The integration of BNPL data into credit scores addresses what many consider phantom debt - financial obligations that existed outside traditional credit reporting. Community discussions highlight how this shadow lending system allowed consumers to accumulate multiple payment plans without lenders seeing the full picture. The Federal Reserve's finding that nearly 25% of BNPL users paid late in 2024, up from 18% in 2023, suggests the risks were real and growing.
Many users express concern that people who appeared creditworthy on paper might actually be overleveraged through multiple BNPL arrangements. This visibility gap meant mortgage lenders and other creditors couldn't properly assess risk, potentially leading to poor lending decisions.
Smart Money Versus Survival Spending
The community reveals a stark divide in how different economic groups use BNPL services. Financially sophisticated users often leverage these interest-free loans strategically, keeping their cash in high-yield savings accounts to earn interest while making payments over time. For purchases with 0% interest over several months, this approach can generate small but meaningful returns.
However, discussions also reveal concerning usage patterns. Some users report seeing BNPL used for basic necessities like food delivery, suggesting financial distress rather than strategic planning. This highlights how the same financial tool can serve completely different purposes depending on the user's economic situation.
If somebody can BNPL or otherwise credit lifesaving medicine, that's not play money because they don't want to work.
BNPL vs Traditional Credit Comparison
| Feature | BNPL | Credit Cards |
|---|---|---|
| Application process | Instant, minimal checks | Formal application required |
| Credit check | Soft check only | Hard credit inquiry |
| Interest rate | Often 0% for 3-6 months | ~20% APR average |
| Payment structure | Fixed installments | Minimum payments with revolving balance |
| Credit reporting | Previously unreported | Always reported |
| Merchant cost | ~6% of transaction | ~3% interchange fee |
The Credit Score Impact Uncertainty
While FICO and Affirm's study suggests most users with multiple BNPL loans would see higher scores or no change, community skepticism runs high. Users worry that the sudden visibility of previously hidden debt could make borrowers appear overleveraged, particularly when applying for major loans like mortgages.
The concern centers on timing and context. A borrower with several active BNPL payments might look risky to a mortgage lender, even if those payments represent small, short-term obligations that will be resolved within months. The challenge lies in how credit algorithms will weight these new data points compared to traditional credit products.
Systemic Issues Beyond Individual Choices
Community discussions reveal frustration with framing BNPL usage as purely a matter of personal financial discipline. Many users argue that rising costs, stagnant wages, and limited social safety nets push people toward these services out of necessity rather than choice. The debate touches on broader economic inequality, with some pointing out that wealthy consumers can game these systems for profit while struggling families face potential credit damage.
The conversation also highlights how BNPL services filled a gap in the traditional credit system, offering quick approval without extensive credit checks. This accessibility made them attractive to consumers who might not qualify for traditional credit cards or who needed immediate purchasing power.
Conclusion
FICO's integration of BNPL data represents a significant shift in credit assessment, bringing previously invisible debt into the light. While this change promises more accurate risk evaluation, it also raises questions about fairness and economic inequality. The community response suggests that the real impact will depend heavily on how these new scores are implemented and weighted, and whether they account for the diverse ways Americans use these financial tools - from strategic optimization to basic survival.
Reference: FICO to incorporate buy-now-pay-later loans into credit scores