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FICO to incorporate buy-now-pay-later loans into credit scores

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277 points cebert | 4 comments | 24 Jun 25 00:03 UTC | HN request time: 0.912s | source
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firesteelrain ◴[24 Jun 25 00:21 UTC] No.44361592[source]▶
Credit scores will tank further
replies(3): >>44361606 #>>44361746 #>>44361866 #
UltraSane ◴[24 Jun 25 01:02 UTC] No.44361866[source]▶
If customers make every payment their score should improve.
replies(4): >>44361943 #>>44362076 #>>44362277 #>>44364598 #
dh2022 ◴[24 Jun 25 01:16 UTC] No.44361943[source]▶
What is the benefit for a consumer to use this type of loan and then pay it back on time versus using a credit card and then paying the card back on time?

To me this seems like a new product that would target a different consumer than the one that makes payments on time. But I would like if someone challenges this view. Thanks!

replies(5): >>44362029 #>>44362066 #>>44362282 #>>44362283 #>>44368088 #
loeg ◴[24 Jun 25 01:32 UTC] No.44362029[source]▶
> What is the benefit for a consumer to use this type of loan and then pay it back on time versus using a credit card and then paying the card back on time?

Slightly longer repayment time frames. (Multiple months instead of just one.)

replies(1): >>44363355 #
1. dh2022 ◴[24 Jun 25 06:25 UTC] No.44363355[source]▶
This sounds like a consumer that does not pay the balance each month…
replies(2): >>44365397 #>>44368232 #
2. wildzzz ◴[24 Jun 25 12:22 UTC] No.44365397[source]▶
CC gives me 30 days to pay it back interest free. BNPL gives me 2, 3, 6, or more months with very little or even no interest. If I know I'm not going to be able to pay it off in a month, I'd rather do a BNPL loan since it's so cheap. Additionally, you can have awful or no credit and still be approved for BNPL. It may be beneficial to have some repaid loans on your credit if you ruined your credit earlier in life like this credit builder CCs that have a super low limit.
replies(1): >>44368139 #
3. Ancapistani ◴[24 Jun 25 16:45 UTC] No.44368139[source]▶
I’ll add that I’ve found that the more you use Affirm at least, the better my options get.

I started by always choosing the shortest “plan”, which was 0% and no fees. After I’d paid off a few of those, I started getting offered plans of up to a year with no interest and very minimal fees.

Now, while I don’t use Affirm for luxury/unnecessary purchases, it offers better rates than any credit card I have, and better than a bank loan in many cases.

I have three Affirm loans right now, for a total of about $8k. All three of those are business expenses, and all three have increased profit in our business significantly more than they cost us.

4. loeg ◴[24 Jun 25 16:52 UTC] No.44368232[source]▶
I should have specified those durations are both interest-free. If you don't pay your credit card off after one month, it accrues interest at fairly high rates.