Buy Now, Pay Later financing has become one of the fastest-growing forms of consumer borrowing in the United States, and new reporting practices could soon make those loans more important to Americans’ credit scores.

According to an Economic Brief published by the Federal Reserve Bank of Richmond, Americans used Buy Now, Pay Later (BNPL) services for an estimated $70 billion in purchases during 2025. While that remains a small fraction of overall consumer borrowing, the market has been expanding rapidly, growing by roughly 20% annually since 2021.

The industry is dominated by six major providers: Affirm, Afterpay, Klarna, PayPal, Sezzle and Zip, which together account for the vast majority of the U.S. market.

The typical BNPL transaction allows shoppers to divide purchases into four interest-free payments spread over several weeks.

The option has become increasingly common at major retailers including Amazon, Walmart and Sephora, giving consumers another alternative to traditional credit cards.

Researchers say younger consumers are driving much of that growth.

According to the Consumer Financial Protection Bureau (CFPB), adults between 18 and 24 years old use Buy Now, Pay Later services at significantly higher rates than older consumers.

One concern highlighted by regulators is “loan stacking.”

Many shoppers simultaneously maintain multiple Buy Now, Pay Later loans across different providers, making it difficult for individual lenders to see a borrower’s complete financial obligations.

Historically, many of these short-term installment loans did not appear on traditional credit reports.

That is beginning to change.

Affirm now reports many of its installment loans to Experian, while FICO continues developing credit-scoring models that incorporate Buy Now, Pay Later activity.

As additional providers begin reporting repayment history, responsible borrowers could benefit by building stronger credit profiles.

At the same time, consumers who miss payments may eventually see negative effects reflected in their credit scores.

Not every provider has adopted the same reporting practices, however.

Some companies continue arguing that traditional credit-scoring systems were not designed for short-term installment products and could unfairly penalize responsible users.

Industry analysts say the reporting landscape remains fragmented, although broader reporting appears increasingly likely over time.

Regulators have also increased oversight.

The Consumer Financial Protection Bureau has expanded consumer protections for Buy Now, Pay Later borrowers, giving shoppers rights that more closely resemble those associated with traditional credit cards, including dispute resolution and refund protections.

Financial experts caution that while Buy Now, Pay Later loans are often marketed as interest-free, missed payments can still result in late fees, collection activity and legal action in some cases.

For consumers, the growing use of Buy Now, Pay Later financing offers greater flexibility but also increases the importance of budgeting carefully and tracking multiple payment schedules.

As more lenders begin sharing repayment information with credit bureaus, these once largely invisible loans are becoming a more visible part of consumers’ overall financial profiles.

For retailers, Buy Now, Pay Later remains an important sales tool.

For borrowers, however, its growing connection to credit reporting means these convenient payment options increasingly carry long-term financial consequences.

This article is for informational purposes only and should not be considered financial advice.

JBizNews Desk | New York
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