The rising popularity of Buy Now, Pay Later (BNPL) options, especially among millennials and Gen Z, has prompted FICO to introduce new credit scores that include BNPL data. A J.D. Power survey indicated that 42% of young consumers are utilizing these loans, which previously were not factored into credit scoring. The new FICO scores aim to empower lenders with a comprehensive view of a borrower's financial behavior, fostering better lending decisions. This move is also poised to enhance credit scores for responsible BNPL users, potentially increasing financial inclusion for younger consumers.
"We want to make sure that we're looking at data that will enable lenders that use the FICO score to have the clearest picture."
"It can really drive financial inclusion. Frequently, people use BNPL, and if represented in credit scores, can drive more creditworthiness."
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