Imminent changes to the U.S. credit scoring system could see millions of Americans face lower credit scores as FICO prepares to incorporate “buy now, pay later” (BNPL) loan data into its calculations this fall. Knewz.com has learned that the move reflects the growing prevalence of BNPL services, which allow consumers to spread out payments with little or no interest, but experts warn that the change may negatively affect users who struggle to make timely payments.

BNPL services have surged in popularity, with an estimated 81.5 million Americans using them in 2024 and projections reaching 91.5 million in 2025, according to Capital One Shopping. Originally designed to ease payments on discretionary purchases, BNPL has expanded into essential spending: 47% of users apply it to groceries and 35% to medical bills. “BNPL offers benefits relative to other credit products that charge higher interest rates, such as credit cards, payday loans, car title loans,” Aditi Routh, an economist at the Federal Reserve Bank of Kansas City, said in a statement. “Consumers can reduce or avoid high costs or interest charges, making them better-off.” Yet she cautioned that late payments may signal overspending, overextension or worsening financial situations, requiring monitoring by researchers and policymakers.

Historically, BNPL arrangements did not affect credit scores. However, that will soon change, potentially creating a significant impact for users juggling multiple loans. LegalShield’s survey of more than 2,000 adults found 62% of BNPL users managed multiple loans simultaneously, and 41% reported making a late payment in the past year, up from 34% the year prior. Rebecca Carter, attorney and LegalShield provider, explained, “The greatest legal risk with BNPL arrangements stems from consumers not fully understanding the contractual terms. Many plans include added costs or interest if balances are not paid within a specified period. Beyond that, consumers often underestimate their broader cost-of-living expenses, which can lead to financial strain. As a result, they may increasingly rely on BNPL for everyday necessities. Because these are typically smaller loans with modest monthly payments, it is easy for consumers to dismiss them as ‘affordable’ without considering the cumulative impact of multiple obligations.”

According to reports, a substantial number of consumers remain unaware of the upcoming FICO changes. LegalShield found that 38% of Americans did not know BNPL data would soon factor into credit scores. Billing errors and disputes are also common: 62% reported billing errors, and 45% had faced legal or contractual disputes over BNPL loans. “It is not surprising that such a large percentage of consumers remain unaware,” Carter said. “Many individuals who rely on BNPL options are already financially vulnerable and focused on meeting immediate needs. Long-term considerations, such as the effect on credit scores, often do not receive the same level of attention in the moment.”

FICO has said that its updated scoring system, part of the FICO Score 10 Suite, will allow lenders to evaluate credit readiness more accurately, particularly for first-time credit users. Julie May, FICO’s vice president of B2B Scores, said, “This innovation also supports our mission to expand financial inclusion by helping more consumers gain access to credit.” While the exact rollout date has not been specified, the changes are expected this fall. Reports have mentioned that consumers with multiple BNPL loans or a history of late payments may see declines in their scores.

Samyarup Chowdhury, Knewz