Buy now, pay later (BNPL) services can positively impact credit scores when used responsibly, according to financial experts. Siddharth Mehta, Co-founder & COO of Kiwi, explains that while BNPL is a distinct form of credit similar to traditional lending, simply using BNPL does not hurt your credit profile. The key factor is consistent, timely, and on-time payment clearance, which can help individuals build a solid credit profile brick by brick and boost their overall credit score. However, missed payments or defaults can adversely affect credit scores, just like any other form of credit. Recent data from Experian UK&I shows that 98.5% of BNPL balances were repaid on time in 2025, demonstrating responsible usage patterns across the sector.
Financial experts emphasize five key considerations for BNPL users to maintain healthy credit profiles. Making all BNPL repayments on time can help build positive credit history, particularly for new borrowers who may have limited access to traditional credit products. Missing payments or defaulting on BNPL dues may negatively affect credit scores and future borrowing ability. Applying for multiple BNPL facilities within a short period may cause temporary decline in credit score due to multiple credit inquiries indicating increased credit-seeking behavior. Borrowing beyond repayment capacity can increase financial stress and affect overall creditworthiness, while not taking BNPL payment due dates carefully can complicate future personal loans, home loans, and other forms of credit. As Experian UK&I's Robert Goodman notes, each time you open a new BNPL account, it will appear on your credit report, which lenders may consider when you apply for new borrowing.
Industry professionals stress the importance of treating BNPL as a credit product rather than free money. Shakti Sekhawat, Business Head of Bharat Loan, notes that BNPL can positively contribute to credit profiles when repayments are made on time and lenders report data to credit bureaus. However, missed payments, delayed repayments, or excessive reliance on multiple BNPL facilities may adversely impact creditworthiness. Kuldeep Yadhuvanshi, Business Head of Rupee112, explains that BNPL offers greater flexibility for managing short-term expenses but should be used with financial discipline, as timely repayments can help build positive credit history while defaults or frequent delays may negatively affect credit scores. Experian UK&I's Goodman advises that it's important to be aware of the commitments you're taking on and keep a close eye on what your repayments will be.
Recent investigations reveal concerning trends in BNPL usage patterns, with nearly 4 in 10 respondents and nearly 6 in 10 respondents under 45 reporting use of BNPL products. A substantial share of users report going into debt to pay for everyday essentials like groceries, utilities, and rent. The CFPB under Rohit Chopra previously took action to provide BNPL borrowers with key legal protections, but these steps were swiftly revoked by the Trump CFPB led by Acting Director Russ Vought. The Trump-led CFPB also announced it would deprioritize enforcement actions against BNPL lenders related to the Truth in Lending Act, creating an environment where Americans face predatory financial practices and junk fees that can turn simple purchases into debt traps. According to recent surveys, nearly half of BNPL users have used the product to help pay for groceries (46 percent), with significant portions using it for medical care (42 percent), other debt (40 percent), utility bills (39 percent), and housing costs (33 percent).
BNPL adoption is experiencing significant growth across global markets, with more than 100 million BNPL transactions across 8.5 million customers in 2025, worth more than £7 billion in spending according to Experian UK&I analysis. The popularity continues to expand, with more than 9 million transactions recorded in March 2026 across nearly 4 million consumers, worth £621 million. Interestingly, average transaction values remain modest at around £60, suggesting consumers are typically using BNPL for lower-value, everyday purchases rather than larger big-ticket items. Surprisingly, users of BNPL aren't just younger consumers, with customer volumes among those aged 65-74 increasing 46% year-on-year and usage among consumers aged 75 and over growing 53%. From July 15th, the Financial Conduct Authority (FCA) will begin regulating the sector for the first time, introducing new consumer protections including clearer information, affordability checks, and access to support if they get into difficulty with repayments.
