Apple and Experian just announced that Experian consumer credit reports will include Apple Pay Later loan information beginning today. Experian reports that this makes Apple the first major buy now, pay later (BNPL) service provider to directly give the credit reporting agency loan information and payment history.
Loans borrowed today will appear on the borrower’s Experian credit report with a BNPL designation starting on March 1, but this data won’t affect credit scores — at least not initially. According to Experian, the information won’t be considered in traditional credit scoring as we know it, but it will likely affect future scoring models.
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Apple confirms that Apple Pay Later loan information in Experian credit reports includes a soft credit inquiry that won’t impact the applicant’s credit score and payment history.
“We designed Apple Pay Later with our users’ financial health in mind, and an important part of this is ensuring that their loans are reflected in their overall financial profiles,” Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet, said in a statement. “By reporting Apple Pay Later loans to Experian, we aim to help promote greater transparency and responsible lending for both the borrower and the lender while allowing users to further build their credit.”
Including these BNPL loans in credit reporting can give consumers a more accurate and comprehensive view of their financial behavior, which can benefit both lenders and borrowers.
For companies like Apple, for which these BNPL loans serve as financial products, reporting its Apple Pay Later loans to credit bureaus helps align this product to traditional credit products and encourages legitimacy and transparency.
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“Experian has long supported the use of expanded data sources, including BNPL information, to help consumers build their credit profile and improve their financial health,” said Jennifer Schulz, CEO of Experian North America. “We applaud Apple for taking this meaningful first step and look forward to working with other leading BNPL providers to drive greater transparency that will benefit lenders and consumers alike.”
As consumer spending habits and credit use evolve, as has happened with the proliferation of BNPL loans in recent years, so do credit scoring models. Credit bureaus and scoring agencies regularly update their models to improve the accuracy of their assessments and predict creditworthiness, so we can expect BNPL loan history to affect credit scores in the future.