NEW YORK—Efforts by FICO to incorporate buy now, pay later activity into U.S. credit scores have hit a roadblock, with major installment payment providers pushing back over concerns about consumer impact, The Wall Street Journal reported.
Klarna and Afterpay, two of the biggest BNPL providers, told the Journal they will not share loan data with credit bureaus until they’re confident it won’t harm consumers’ credit profiles.
“Credit reporting, scoring and interpretation still largely operate under legacy frameworks,” said Juan Hernandez, head of credit and underwriting at Block, Afterpay’s parent company.
Block declined to comment further, but Klarna told PYMNTS it supports FICO’s push to modernize credit scoring — with caution.
“For years, we have supported credit reporting that benefits consumers — that’s why we share BNPL data in the U.K. and report our term loans in the U.S., making it visible to consumers but excluded from credit scores,” the statement said. “While the U.S. credit reporting framework doesn’t reflect how short-term BNPL products are used, we look forward to a system where these products can contribute positively to consumers’ credit standing.”