Historically, credit reports have included some BNPL accounts, for instance, if you use catalogue retailers this will likely appear on your credit profile. However, until recently, short-term BNPL schemes (also known as “deferred-payment credit” accounts) have not been reported to credit reference agencies. This is now set to change.

Credit reference agencies will now start to analyse short-term BNPL schemes and factor these into your credit report, therefore, if you use BNPL schemes, this will directly influence your credit score. Lenders use your credit profile and your credit score to determine whether you are eligible to a loan and to determine the rate of interest for a loan. Keeping your credit score as high as possible is very important, so keep this in mind if you do decide to use a BNPL scheme.

A straightforward and practical way to consider a spending decision is to decide whether the product that you have seen is a want or a need. One of the concerns surrounding BNPL and its popularity is that it can influence consumers to spend more money on impulse purchases, therefore it is always wise to question yourself. Using this rule of questioning a decision can be helpful, as it can ultimately save you a lot of money.

Noting down your payment dates for BNPL can help you to avoid missing payments and incurring late fees. If you have a set date for repayments, consider creating a reminder on your phone that will prompt you to make your repayment. If you had some spare funds, you may also consider making an early repayment, if your BNPL provider has this option available. Direct Debits might be available with some providers, however, keep in mind that this is not an option for all providers.