Consumer reporting agency (CRA) Equifax will include ‘buy now, pay later’ accounts to credit reports in February 2022 according to WSJ. These types of payment programs are becoming increasingly popular with Afterpay doing $9.8 billion in payments in the 12 months ending June 30, 2021.
These buy now, pay later companies have been hesitant to report these accounts to CRAs due to the fact that these accounts are frequently opened and closed for small purchases and this frequent account opening would cause users credit scores to drop. Equifax will include both positive and negative information from these buy now pay later programs. According to an Equifax study those with a thin credit file saw their credit scores increase by 21 points on average, whereas those with a regular credit file saw their score increase by 13 points on average. It’s not clear how Equifax will treat these accounts and if they will affect scoring factors such as ‘Average Age of Accounts‘ and ‘Recent Searches for New Credit‘.
