Buy now pay later and your credit score: what lenders can see

What is buy now pay later?

Buy now pay later, or BNPL, lets you take a purchase home and pay it off in instalments, often with no interest but with fees if you pay late. It sits somewhere between lay-by and a credit card. Moneysmart notes that you usually do not pay interest but may pay fees, including late fees, account-keeping fees and establishment fees, and that “interest free” offers can still carry costs.

Because it feels small and casual, many people do not think of BNPL as borrowing. Lenders do, and since 2025 the law increasingly does too.

What changed on 10 June 2025?

ASIC states that BNPL contracts became regulated credit under the National Credit Code from 10 June 2025. From that date, anyone engaged in BNPL credit activities needs an Australian credit licence, and providers must be members of the Australian Financial Complaints Authority. Contracts that meet a prescribed definition of low cost credit can elect modified responsible lending obligations, while others are regulated like other credit contracts.

For borrowers, the headline is that BNPL is now treated as credit rather than as something outside the system. Providers are expected to assess affordability in some form, and more of them are expected to take part in credit reporting.

Does BNPL show up on your credit report?

It can. According to Experian:

• A provider that is licensed and takes part in comprehensive credit reporting may report your repayment history.
• For a new account with such a provider, history appears from the account opening date.
• For an existing account, only history from the point the provider starts reporting is included.
• Providers that do not take part do not report repayment history.
• Other information that is commonly sent includes identity details, account details, credit enquiries and defaults.

Moneysmart makes the practical point plainly: BNPL arrangements, late fees and applications may appear on your credit report, and late or missed payments can be reported and reduce your score. Because providers differ, the safest step is to read each provider’s terms and check your own report, as outlined in how to get your free credit report.

How do credit checks work with BNPL?

Moneysmart says each application triggers a credit check, and many checks can lower your score and signal risk to lenders. A credit check by a provider is recorded as an enquiry, and the OAIC says enquiries stay on your file for five years. One or two will rarely matter on their own. A pattern of many in a short period looks different, which is explained in what is a credit enquiry and why applying everywhere hurts your score.

What happens if you miss BNPL payments?

Late fees usually come first. If payments are reported, late repayments can show on your file and reduce your score. Experian describes defaults as generally involving accounts that are more than 60 days overdue and above a minimum amount. Defaults stay for five years under the OAIC’s rules, so a small BNPL debt left unpaid can have a long shadow. The better path is contacting the provider early; Moneysmart notes all BNPL providers must have complaints and hardship services.

How do lenders treat BNPL when you apply for a loan?

Even where BNPL is not reported, lenders can still consider it. Experian says credit providers may consider BNPL usage when assessing creditworthiness, and multiple applications in a short period may make lenders see you as a higher risk. In practice:

• Your bank statements will show BNPL repayments, so the lender can see the pattern.
• Frequent use can suggest a tight budget, even if every payment is on time.
• Some lenders ask you to list BNPL accounts as part of your liabilities.
• Others may count the repayments in your living costs or as commitments.

How much weight a lender gives it varies. Our guide on loan serviceability explains the broader test. A tidy run of statements without BNPL for a few months before applying often makes the file simpler, which is one of the tips in how to get loan ready.

Is it better to close BNPL accounts before applying?

There is no single answer. Clearing the balance, stopping new purchases and letting a few months of clean statements build up is a common sensible approach. Closing the account is a separate decision, and it depends on how the provider reports. Speak to a broker if you are close to applying, and do not skip payments to avoid a closure. The guide on how to improve your credit score has the wider picture.

What if BNPL has become a problem?

If several BNPL accounts are stacking up alongside cards and personal loans, the monthly total can be heavy. Options include talking to the providers about hardship arrangements, or looking at whether combining debts makes sense. The National Debt Helpline offers free, confidential support through financial counsellors. Where it fits, structures such as debt consolidation personal loans or, for property owners, a second mortgage for consolidation can be looked at. That is general information, not personal advice, and it depends on your circumstances. For more on the product itself see BNPL explained.

Does Ownright offer BNPL?

No. BNPL is not something we arrange, but it is something we understand, because it shows up in applications all the time. We can look at what is available for your goal, whether that is a first home buyer loan, a personal loan or a business loan, and what a lender will think of your BNPL history.

How does Ownright approach BNPL on a loan file?

Ownright is about solutions. Trevor Scott has more than 40 years in finance, and the team arranges loans Australia-wide. We include BNPL in the conversation honestly, because lenders will see it anyway. An illustrative example: an applicant has four small BNPL accounts and a moderate credit history. A broker may suggest clearing them over a couple of months, then lodging with a lender whose policy suits the profile. Timing varies by lender and situation.

What mistakes should you avoid with BNPL?

• Opening several accounts in a short period before a major loan.
• Leaving BNPL off a loan application when it appears on your bank statements.
• Missing a small payment because the amount feels trivial.
• Assuming that unreported means invisible.

How can you use BNPL without hurting your next loan?

If you choose to keep using BNPL, a few habits keep the risk down.

• Limit yourself to one provider at a time, which Moneysmart also suggests, so repayments are easier to track.
• Set a spending limit that you can afford alongside rent, bills and loan repayments.
• Link payments to a debit card rather than a credit card, to avoid card interest on top.
• Pay on or before the due date, and avoid letting late fees stack up.
• Avoid opening new accounts in the months before a major loan application.

These are general habits, not personal advice, but they match the pattern lenders like to see: steady, predictable conduct with no spikes.

What should you tell a broker or lender about BNPL?

Be upfront. List every BNPL account, with the provider, the balance and the repayment schedule. If the lender sees a repayment on your statements that you left off the application, it can raise questions about the rest of the file. A short, honest list protects your credibility.

It also helps to know that policies vary. Some lenders count BNPL repayments as ongoing commitments, others look at them only as spending. A broker who works with many lenders can place a file with one whose approach suits. For wider context, see what is loan serviceability, how to get loan ready and bad credit home loans.

Sounds like you’re planning your next loan?

Sounds like you’re weighing up how everyday credit like BNPL affects the loan you actually want. We’re the lending experts in finding a fit even when your credit file is not perfect, so click the button and see if you qualify.