FICO Introduces Pay-In-Four Loans

This is a news story, published by Yahoo Finance, that relates primarily to Affirm news.

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new credit scoring model

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Business

Business & Economics

Buy Now, Pay Later loans will soon affect some credit scores

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85% Informative

FICO is rolling out a new model that factors short-term loans into their consumer scores.

Previously, the loans had been excluded, though Buy Now , Pay Later company Affirm began voluntarily reporting pay-in-four loans to Experian , a separate credit bureau, in April .

The new scores will be available beginning in the fall, as an option for lenders to increase visibility into consumers' repayment behavior.

Rust said the average BNPL loan is for $ 135 , and that repaying such small loans, even consistently, might not result in changes to a credit score that would significantly move the needle.

Rust said that increased transparency around the loans could create a more accurate picture of a consumer's debts.

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