FICO, a provider of credit scores, announced it will start incorporating Buy Now, Pay Later (BNPL) loan histories into its credit scoring models in the fall. The new FICO Score 10 BNPL and FICO Score 10 T BNPL will provide lenders a more complete view of a consumer's creditworthiness, especially as BNPL options have become increasingly prevalent. This move reflects the growing importance of BNPL in consumers' financial activities, aimed at improving credit evaluations for those primarily engaging with BNPL products. Certain BNPL loans are currently not reported to credit bureaus, which has hampered traditional credit assessments.
"Buy Now, Pay Later loans are playing an increasingly important role in consumers' financial lives," stated Julie May, vice president and general manager of B2B Scores at FICO.
It is the first credit scores from a leading provider to include BNPL data, and marks the first time FICO has launched scores to account for a type of loan.
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