Buy now, pay later plans will soon impact your credit score—what you need to know

One of the benefits of buy now, pay later loans is changing.

FICO, the company that calculates most of Americans’ credit scores, announced Monday it would be releasing a credit score model this fall that considers BNPL loans, The Wall Street Journal first reported.

Banks and lenders will be able to see one score that considers users’ BNPL loans and one that does not, and decide which to use as they consider borrowers’ creditworthiness, WSJ reports. The three credit reporting bureaus — Equifax, Experian and TransUnion — can then decide which score borrowers see and what’s included in their credit reports.

“This is an area where I welcome greater controls when it comes to borrowing,” says Douglas Boneparth, a certified financial planner and founder of Bone Fide Wealth. Boneparth recently called BNPL plans a “scam” in a LinkedIn post.

“If someone who’s demonstrated bad borrowing behavior in the past is trying to continue that behavior through buy now, pay later programs, but now is unable to do that because [of] credit reporting, then I welcome those types of controls,” he added.