Buy Now Pay Later (BNPL) services like Klarna, Clearpay, and Laybuy have transformed how millions of UK shoppers handle online purchases. With promises of interest-free instalments and lightning-fast approvals, it’s easy to see why they’ve become so popular. But as BNPL becomes more deeply woven into our everyday spending, one crucial question remains: how do these services affect your credit score?
The answer is more complex than a simple yes or no. In this guide, we’ll break down how BNPL works behind the scenes, what providers report to credit agencies, and how you can use BNPL without putting your credit profile at risk.
What Is BNPL and Why Is It So Popular?
Let’s start with the basics. BNPL allows consumers to split purchases into instalments – usually interest-free – over a period of weeks or months. Rather than paying £120 upfront for a pair of trainers, a user might pay £30 every two weeks. What began as a way to ease cash flow for small purchases has now expanded to larger categories, from tech gadgets to furniture to travel.
Its popularity stems from a mix of flexibility, instant gratification, and (until recently) light or no credit checks. For many users, it feels less intimidating than applying for a traditional credit card.
In short, BNPL is popular because it feels easy but understanding how it fits into your financial life is essential.
How Credit Scores Work
Before we dive into BNPL’s impact, it’s worth understanding the system it affects. Your credit score is a number that reflects how reliable you are as a borrower. It’s calculated by agencies like Experian, Equifax, and TransUnion based on your payment history, credit utilisation, length of credit history, types of credit, and recent applications.
A high score means lenders see you as low-risk, which can lead to better interest rates and approvals for things like mortgages, car finance, and credit cards. So it’s crucial to protect it, especially if you’re planning big financial moves in the near future.
With this in mind, let’s explore where BNPL fits in and why it might matter more than you think.
Do BNPL Providers Report to Credit Bureaus?
Here’s where it gets complicated. Not all BNPL providers report to credit agencies, but more are Here’s where it gets complicated. Not all BNPL providers report to credit agencies, but more are starting to.
- Klarna: Began reporting to UK credit reference agencies in 2022 for ‘Pay in 30’ and ‘Pay in 3’ plans.
- Clearpay: Does not currently report on-time payments, but missed payments may still be flagged internally.
- Laybuy: Used to report both on-time and late payments before being taken over by Klarna.
- Zilch: Reports to credit agencies and markets itself as a credit-building tool.
So yes, depending on the provider, your BNPL activity can show up on your credit file. That means both good and bad behaviour can influence your score.
As reporting expands, your BNPL behaviour is no longer hidden, so it’s more important than ever to use it responsibly.
How BNPL Can Help Your Credit Score
Used wisely, BNPL can become a tool, not a trap. Here’s how:
- On-time payments: Making consistent payments shows you’re reliable, just like with a credit card or loan.
- Credit mix: If you’re already responsibly using other forms of credit, BNPL adds to your ‘credit mix,’ which can slightly boost your score.
- Low balance ratios: BNPL often involves smaller balances, keeping your debt-to-credit ratio low if you manage your purchases appropriately.
When used carefully and intentionally, BNPL can support your credit score, not sabotage it.it.
How BNPL Can Hurt Your Credit Score
Here’s the flip side. BNPL isn’t risk-free. In fact, misuse can quietly sabotage your credit:
- Missed payments: If your provider reports late payments (or hands them to collections), this can significantly lower your score.
- Multiple open accounts: Opening many BNPL loans at once can appear risky to lenders.
- Over-reliance: Using BNPL to fund purchases you can’t afford could spiral into debt, without you even realising it.
The trap lies in its ease: no upfront cost, no hard credit check, and boom – you’ve got six ongoing loans without a repayment plan.
Don’t let the convenience fool you. If you fall behind, BNPL has the same financial consequences as any other credit product.
Common Misconceptions
There’s a lot of misinformation floating around BNPL. Let’s bust a few myths:
- “BNPL doesn’t count like real credit” – False. Many BNPL loans are considered credit agreements and can appear on your credit report.
- “It won’t hurt my score if I miss a payment” – Also false. Late payments, especially repeated ones, can seriously impact your score.
- “It’s safer than a credit card” – Not necessarily. Both have risks if mismanaged.
BNPL might feel different, but in the eyes of lenders and credit agencies, it still counts. And so does your behaviour.
Smart Tips to Use BNPL Without Damaging Your Score
Want to use BNPL without wrecking your financial reputation? Try these smart habits:
✅ Limit usage: Stick to one BNPL provider and avoid stacking loans across platforms.
✅ Set reminders: Use calendar alerts, emails, or app notifications to never miss a payment.
✅ Keep track: Maintain a spreadsheet or use a finance app to monitor your active BNPL agreements.
✅ Budget first: Only use BNPL for things you could pay for in full – treat it as a budgeting tool, not free money.
These tips don’t just protect your score, they protect your peace of mind..
Conclusion: A Tool or a Trap?
BNPL is here to stay, but how it affects your credit score depends entirely on how you use it. Treat it casually, and it could quietly damage your financial future. Treat it wisely, and it can be a flexible, fee-free credit tool that supports your lifestyle without hurting your score.
In 2025, with more providers reporting to credit bureaus, your BNPL behaviour is now part of your financial identity. Use that to your advantage. Know the rules, understand the risks, and build your credit smartly, one responsible payment at a time.
