PaymentsJournal
No Result
View All Result
SIGN UP
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
PaymentsJournal
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
No Result
View All Result
PaymentsJournal
No Result
View All Result

FICO Debuts Credit Scores with BNPL Data

By Tom Nawrocki
June 23, 2025
in Analysts Coverage, Credit
0
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
The FICO Score and Alternative Data: Opening the Sales Funnel Is One Thing, Mitigating Risk Is Another 

The FICO Score and Alternative Data: Opening the Sales Funnel Is One Thing, Mitigating Risk Is Another 

After a year of research, FICO is introducing two new credit score models that incorporate buy now, pay later data in their calculations.

FICO Score 10 BNPL and FICO Score 10 T BNPL will be available alongside the existing versions of the FICO Score at no additional cost, giving lenders the ability  to evaluate the impact of BNPL data within their current evaluation processes.

Impacts of BNPL Loans

FICO’s year-long joint study of BNPL data confirmed that consumers frequently open a large number of these loans within a short period. As a result, FICO aggregated separate BNPL loans when calculating certain in-model variables.

However, the presence of these loans had less impact than some might expect. In examining BNPL loans taken out through Affirm, FICO found that new BNPL loans affected credit scores by approximately 10 points for more than 85% of the customers surveyed.

Furthermore, that movement was more likely to be positive than negative. Most consumers who had recently taken out five or more Affirm loans either saw their scores increase or experienced no change. 

Casting a Wide Net

In developing the new models, FICO also consulted with some of the largest lenders in the U.S. Across this group, there was broad consensus that integrating BNPL data into credit scoring would allow lenders to make more informed and accurate decisions.

“FICO Scores continue to be the top predictor in credit quality, and issuers use the score from stem to stern in the credit process,” said Brian Riley, Director of Credit at Javelin Strategy & Research. “That means issuers take advantage of the FICO scoring process at the acquisition point, through the credit management cycle, and even when they securitize their portfolios in Asset-Backed Securitizations.”

These changes have been in motion for some time. In June 2022, the Consumer Financial Protection Bureau requested that consumer reporting companies incorporate BNPL data into core credit files. The only major BNPL provider to begin reporting its loan data was Affirm, which ultimately partnered with FICO on the new scoring models.

“FICO leads the scoring function in the U.S. and many other markets,” said Riley. “Their integration of BNPL certainly adds a solid perspective, just as the latest version of FICO 10-T. BNPL is here to stay, and this dimension will ensure that the product has the visibility consumers and lenders want.”

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Tags: AffirmBNPLBuy Now Pay LaterCreditCredit Score

    Get the Latest News and Insights Delivered Daily

    Subscribe to the PaymentsJournal Newsletter for exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    mortgage

    The Rich Benefits of In-House Payment Systems

    July 9, 2025
    digital cards

    Beyond Plastic: Why Digital Cards Are the Future

    July 8, 2025
    What Premium Card Overhauls by Chase and Amex Reveal About the Credit Card Market

    What Premium Card Overhauls by Chase and Amex Reveal About the Credit Card Market

    July 7, 2025
    Rewire Acquires Imagen, Looking at Prepaid Cards for Migrant Workers

    Smells Like Team Spirit: What Makes Cobranded Credit Cards Work

    July 3, 2025
    uk banking outages

    New Continuous Strategies for Battling Account Takeovers

    July 2, 2025
    Fraud Monitoring

    What to Expect When Nacha’s Fraud Monitoring Rules Take Effect

    July 1, 2025
    payments

    Don’t Just React to What’s Next in Payments—Anticipate It

    June 30, 2025
    consumer debit

    As Payment Types Proliferate, Debit Cards Still Go Strong

    June 26, 2025

    Linkedin-in X-twitter
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter

    ©2024 PaymentsJournal.com |  Terms of Use | Privacy Policy

    • Commercial Payments
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    No Result
    View All Result