The upcoming changes in credit scoring by Fair Isaac Corp to include buy-now, pay-later (BNPL) data represent a pivotal shift in the financial landscape. Previously, BNPL usage did not affect consumers' FICO scores, leaving lenders unaware of borrowers' debt levels. With over 50% of Americans using BNPL, this sector has grown significantly, from a niche market to a $94 billion industry. As lenders gain insight into BNPL debt, there will be positive ramifications for responsible borrowers, along with potential negative impacts for those with poor payment histories.
The move is a huge deal for the financial sector and US consumers, marking the first time FICO has ever specifically reckoned with a particular type of loan.
BNPL has become an essential part of the economy in developed countries, with over half of all Americans using it to finance stuff like lunch deliveries and school supplies.
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