| BNPL provider | Can it affect your credit score? | Does it perform a hard credit check? | Will it report missed payments? |
|---|---|---|---|
| Afterpay | Yes | Yes | Yes |
| Zip Pay | Yes | Yes | If you default on a payment |
| Zip Money | Yes | Yes | If you default on a payment |
| Klarna | Yes | Yes | Yes |
| Humm | Yes | Yes | Yes |
| Brighte | Yes | Yes | Yes |
| PayPal Pay in 4 | Yes | Yes | Yes |
1. If it performs a hard credit check
2. If it reports late or missed payments
When you apply for a credit product, the provider will normally perform either a soft or hard credit check before it approves you. A soft credit check will not show up on your credit report and won't affect your credit score, whereas a hard credit check can.
The other way a BNPL provider can affect your credit score is if you fail to make a payment by more than 14 days.
Some BNPL providers will report these missed payments to the credit reporting bureaus that calculate your credit score. Any missed payments that are recorded on your credit report can also damage your score.
For example, Afterpay does a credit check when you sign up, and its Credit Reporting Policy says it may report missed payments to the credit reporting body Experian Australia (formerly illion), so using Afterpay can affect your credit score.
Other BNPL providers may also perform hard credit checks or report missed payments, both of which can have a negative impact on your credit score.
Afterpay performs a credit check when you sign up, and Afterpay says this enquiry may be visible on your credit report and may impact your credit score. It may also run a credit check when it assesses you for a higher spend limit, and it says these checks are part of its obligations under Australia's buy now pay later regulations.
If you don't meet your Afterpay repayments, Afterpay's Credit Reporting Policy says it may disclose this to the credit reporting body Experian Australia (formerly illion), and information about overdue payments may affect your creditworthiness.
This could leave you in a tight spot later down the line when applying for more significant loans, like a mortgage.
As long as you're using Afterpay in a responsible way and making your payments on time, missed payments shouldn't end up on your credit history.
Zip Pay affects your credit score if you don't pay your bills on time or default on your repayments.
It may perform a credit check as part of the application process, so it's important to keep an eye on your credit score if you want to use Zip.
You shouldn't have any issues as long as you're responsible with Zip and are making payments on time.
Owned and run by Zip, the same company as Zip Pay, Zip Money operates similarly but offers a higher credit limit than Zip Pay for larger purchases.
Beyond credit checks and missed payment reports, using BNPL services can still hurt your credit rating if they get in the way of you paying off other bills on time.
Finder research from May 2024 found 29% of Afterpay and BNPL users had missed another bill payment because they had to pay off a BNPL debt first. 12% had even skipped a meal because of the money they owed on their BNPL account.1
With BNPL services widely used in Australia, it's important you don't use it to take on too much debt. Even if the service might not hurt your credit score directly, it can still have a wider impact on your finances.
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