Buy now, pay later loans, which can be found at places like Affirm, Klarna, and more, have exploded in popularity over the past few years. Now, new reports are claiming that they will be added to credit reports like Equifax and Experian in the coming year.

Equifax, which announced earlier this month its intentions, will begin recording these installment plans on reports in early 2022. Currently, some BPNL companies do report some loan information to certain credit bureaus, such as Affirm, but for Equifax, it will be the first to add BNPL information in such a way.

Lenders will now have “a fuller picture of people’s financial commitments, like how much they owe on these plans,” the bureau shared with WSJ. It also notes that includes on-time BNPL loan payments on a credit report, which could potentially increase consumers’ credit scores. Missing these payments could also significantly lower a consumer’s credit score, just like doing so with a credit card payment.

BNPL loans, also called point-of-sale loans, are relatively easy to qualify for, and are especially popular among younger consumers. Equifax says including on-time payments in credit reports could help those younger consumers to build their credit history. 

If you’re interested in taking out a BNPL loan, make sure that you can pay it back.

“Just because you qualify for BNPL, or any other credit product, doesn’t mean you should use it,” says the Consumer Financial Protection Bureau.

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