Ask the expert

Caroline Siarkiewicz, chief executive at Money and Pensions Service, is here to help.

Q

Will Buy Now, Pay Later affect my credit score?

A

While it might be tempting to use Buy Now, Pay Later (BNPL) when shopping online, these schemes are not always clearly explained, leaving customers unaware of the risks.

Without proper affordability checks, shoppers may find it difficult to keep up with repayments, leading to additional charges, bigger bills and ultimately affecting their credit score. According to research by Compare the Market (Jan 2021), of those who used BNPL in the last year, one in five say it negatively impacted their credit score.

Most BNPL providers, including some of the better-known brands, reserve the right to file missed or late payments with credit reference agencies; a mark that can stay on your file for up to six years. You can check your credit score regularly and for free using services like Clearscore or Credit Karma to clarify whether any late payments have been noted on your credit report.

I would urge anyone who is thinking about using BNPL to consider this type of borrowing very carefully and look at alternative options first, such as using a credit union or, ideally, saving up for the item before you purchase. For more about BNPL and all sorts of useful money, debt and pensions support, visit www.moneyhelper.org.uk.