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Klarna to report missed payments and product use to credit agencies from June

ended 04. May 2022

Shopping and payments service Klarna will start to report the use of buy now pay later (BNPL) products to UK credit reference agencies from June. It will report consumer purchases paid on time, late payments and unpaid purchases for “pay in 30” and “pay in three” orders made on or after June 1 to Experian and TransUnion. What are your thoughts on this? Is it good news as less people will be tempted to use BNPL (Buy Now Pay Later) services in an already challenging financial environment? Also, any broader thoughts on Klarna's business model?

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Joshua GerstlerVerified
Chartered Financial Planner at The Orchard Practice
“The more transparency around buy-now-pay-later companies, the better. Many would-be and existing mortgage borrowers may think twice about this type of debt which will now start to appear on their credit report. For those that pay on time, it will help boost their credit score, but for those who do not pay on time, it is likely to cause them problems. The solution? If you cannot afford to pay for it now, don't buy it. This is more important than ever amid the cost of living crisis and with interest rates rising."