“Buy now, pay later” will count in scoring

Fico, one of the main providers of credit reports and scoring in the US, begins to take into account data on postponed payments. This is to not only allow better to assess the risk of e.g. banks, but also to facilitate access to borrowing for customers who until now used only BNPL (Buy Now, Pay Later).

Sooner or later, all important credit agencies will probably want to use the data on the payment of obligations by customers using postponed payments. The product, in short, is the most dynamically developing part of the consumption financing market. Information about debt resulting from postponement of payments in many countries is already in the credit history (also in Poland), but they are not always used to calculate a point assessment important for banks.

The movement in this direction was made by Fico, a company providing scoring and reports when assessing creditworthiness. Fico customers, i.e. lenders and banks, can use two new products – Fico Score 10 BNPL and Fico Score 10T BNPL. These are point assessments taking into account information from companies serving postponed payments.

Fico indicates that enriching data used for credit risk modeling will allow you to better assess the credibility of customers who have not yet dealt with classic loans, but only with BNPPL. We would like to remind you that also in Poland a large group of postponed payment users are debutants on the market. This is confirmed by the credit information office.

A specific feature of BNPL is the ability to launch many contracts in a short time – e.g. making 10 purchases with deferred payment in one month. Fico indicates that in its scoring models such transactions combine such transactions for the needs of calculating some variables. This allows you to capture significant dependencies that can translate into increasing scoring for some debtors.

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