New Credit Score Models Will Reflect BNPL Activity

FICO, after conducting a study with Affirm, intends to launch FICO Score 10 BNPL and FICO Score 10 T BNPL this Fall, a credit scoring model for Buy-Now-Pay-Later (BNPL) activity. The unique characteristics of BNPL, such as the frequent turnover of its accounts, its ability to help younger consumers build a credit history, and the ability for consumers to quickly overspend and assume a lot of debt, required a new approach to understand this novel form of credit. While the model is expected in the Fall, the pick-up rate may be delayed as lenders may not want to invest in the new technology for this process. 

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