Can Buy Now, Pay Later Plans Help You Build Credit?

BNPL is a popular way to buy everything — and some loans are starting to show up on credit reports.

Concept art of someone using BNPL technology
(Image credit: Getty Images)

Apple recently announced that loans made through its buy now, pay later program will be reported to Experian, a major credit reporting company. If more lenders follow Apple’s lead, the change could help consumers who use these loans build a credit history — but it could hurt their credit scores, too. 

BNPL services allow consumers to spread payments on their purchases over a few weeks or months, typically without interest if payments are made on time. Unlike layaway plans of the past, which required buyers to wait to claim a purchase until they had paid it off, BNPL provides instant gratification, which has made the loans popular with consumers. More than 40% of U.S. adults have used at least one BNPL service, according to a survey by Bankrate

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Problems users have experienced:
Difficulty obtaining a purchase/refund18%
Regretted a purchase17%
Dissatisfied with purchase or experience17%

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Ashlyn Brooks
Kiplinger Contributor

Ashlyn Brooks is a financial writer and former civil engineer. She's on a mission to show others how to save and spend smarter through purposeful money habits. Her work has been featured on Investopedia, Bankrate and Yahoo Finance.