Credit Score - BNPL

lhwrandal

I am thinking to use Paypal Pay in 3 to split the cost evenly for an expensive purchase.  Could buy now pay later impact my credit score even if all payments are on-time?

Nasqueron

Credit scores are not a thing in the UK

If you use BNPL, it will show as a credit agreement, provided they are made on time and in full over the term, you should be fine. 

The score might tank but no-one cares

CliveOfIndia

As above, your score will very likely drop slightly, since it will be registered as a new credit product.  Your score will drop in response to any change in your credit circumstances, whether good, bad or indifferent.  But since the score you see on your CRA report is not used - nor even seen - by any lender, it makes not one jot of difference.

So long as you make the repayments on time and in line with your contractual obligations, this will reflect positively on your credit history - which is the important part.  A short credit agreement of 3 months will, admittedly, make only a tiny difference - but it will be a positive difference, nonetheless.

MEM62

lhwrandal said:

Could buy now pay later impact my credit score even if all payments are on-time?

On the basis that your credit 'score' is, effectively, a randomly generated number and the only one that sees it is you it will not impact in any meaningful way.  

lhwrandal

Understood that credit score is only a number.  On the other hand, with an active BNPL in my credit file, would it impact my ability to apply for credit, for example mortgage?

400ixl

It will be part of any future affordability calculation for any credit application, just like any loan.

Nasqueron

lhwrandal said:

Understood that credit score is only a number.  On the other hand, with an active BNPL in my credit file, would it impact my ability to apply for credit, for example mortgage?

If you had it and paid it off in time, before applying, it should be ok but it's generally recommended not have hard credit checks done just before applying for a mortgage.

A paid off BNPL without interest etc won't make a huge difference to anything