Do Buy Now Pay Later Plans Affect Your Credit File in the UK?

Buy Now Pay Later (BNPL) services like Klarna, Clearpay, and Zilch have transformed how UK consumers shop, reaching £13.8 billion in transactions by 2024. However, the rules surrounding how these unregulated credit products interact with your credit file remain fragmented and often confusing.

The simple question "Does BNPL affect my credit score?" does not have a simple "Yes" or "No" answer. It depends entirely on which provider you use, which Credit Reference Agency (CRA) checks your file, and whether you pay on time.

This guide sets out the current reporting landscape, explains which providers share data with whom, and details the significant regulatory changes scheduled for July 2026.

• It Depends on the App: Some providers report your usage to CRAs; others do not.
• Klarna: Reports to Experian and TransUnion. Usage is visible on your file.
• Zilch: Reports to all three (Experian, Equifax, TransUnion). It actively markets itself as a credit builder.
• Clearpay: Does not currently report standard repayment data to any CRA.
• Impact: Even if reported, BNPL data is often treated differently from credit card data. However, unpaid debts from any provider can be passed to debt collectors, leading to Defaults that destroy your score.
• Future: From 15 July 2026, new regulation is expected to standardise mandatory reporting for all providers.

Currently, BNPL reporting is voluntary. Providers choose whether to share data.

The "Soft Search" Standard

Most BNPL providers use a Soft Search when you apply.

• Soft Search: Checks your eligibility without leaving a visible footprint. Other lenders cannot see it. This protects your credit score from "application damage."
• Hard Search: Standard credit cards use a Hard Search, which is visible.
• Result: You can use BNPL multiple times without accumulating the "too many applications" warning markers that usually lower a credit score.

Reporting Payments

Once the account is open, reporting varies:

• Klarna and Zilch report your repayment history (Paid on time / Late). This builds a "payment profile" on your credit file, similar to a credit card.
• Clearpay keeps this data private. Good behaviour helps you get more credit with Clearpay, but it does not improve your credit score with Experian.

The "Phantom Debt" Problem

Because reporting is patchy, lenders (like mortgage banks) often cannot see your total BNPL debt. You might owe £1,000 across 5 Klarna plans, but if the mortgage lender only checks Equifax (where Klarna doesn't report), they might think you are debt-free. This creates an affordability risk.

Timeline for Regulation (2026)

The UK government has laid down legislation to bring BNPL under full FCA regulation.

• Date: 15 July 2026.
• Section 75: From this date, BNPL purchases (£100–£30,000) will gain Section 75 protection, making the lender jointly liable for faulty goods (just like a credit card).
• Ombudsman: Consumers will have the right to complain to the Financial Ombudsman Service (FOS).
• Reporting: Mandatory reporting to all CRAs is expected to be part of the new framework.

Negative Data Retention

Regardless of whether a provider reports positive data, negative data almost always finds its way to your file eventually.

• Late Payments: Reporting providers (Klarna/Zilch) record late payments (Status 1, 2, 3) on your file. These stay for 6 years.
• Defaults: If you fail to pay any provider (even Clearpay), they will eventually sell the debt to a collection agency. The collection agency will report the Default to all three CRAs. This stays for 6 years and is a major credit negative.

"BNPL helps me build credit."

Only if you use a reporting provider. Using Clearpay for 5 years does nothing for your credit score because they don't share the data. Using Zilch or Klarna can build credit, provided you pay on time.

"BNPL is safer than a credit card."

Not necessarily. Until July 2026, BNPL lacks Section 75 protection. If a merchant goes bust or sends faulty goods, getting a refund from a BNPL provider can be harder than claiming a "Chargeback" or Section 75 refund from a regulated credit card issuer.

"Lenders can't see it."

Do not assume invisibility. Even if the credit file doesn't show the account, mortgage lenders review bank statements. If they see regular outgoing payments to "Klarna" or "Clearpay," they will ask about them and deduct them from your affordability calculation.

The "60F Exemption" (Merchant Credit)

Some store-specific finance (e.g., "Pay later with [Brand Name]") operates under the "60F" exemption in the Consumer Credit Act (interest-free, less than 12 months, less than 12 payments). These specific agreements may remain outside the full scope of new regulations depending on how they are structured.

Retroactive Reporting

When Klarna began reporting in 2022, they did not backdate older purchases. Generally, reporting applies only to new or active agreements from the start date of the reporting arrangement.

Pre-2026 Agreements

The new protections arriving in July 2026 will likely apply to agreements made on or after that date. Old debts will not suddenly gain Section 75 protection retrospectively.

1. Assume Visibility: Treat BNPL like any other debt. Assume a mortgage lender will find it, either on your credit file or your bank statement.
2. Check Your File: Download your Statutory Report from Experian and TransUnion. Check if your BNPL accounts are listed. If they are, ensure the data is accurate.
3. Watch Utilisation: Unlike credit cards, BNPL plans often look like "loans" rather than "revolving credit." Having 10 small active loans can look messy to an underwriter, even if they are paid on time.
4. Prioritise Payments: Because BNPL amounts are often small, it's easy to forget one. A £20 missed payment causes just as much damage (a "1" marker) as a £2,000 missed payment. Automate everything.

• Fragmented System: Klarna and Zilch report; Clearpay does not.
• Soft Search: Applications protect your score, but repayments (or lack thereof) can still harm it.
• Bank Statements: Lenders see BNPL payments on your bank statement even if they miss them on your credit file.
• Regulation 2026: Prepare for July 2026, when BNPL will become fully regulated, meaning mandatory reporting and Section 75 protection.
• Risk: The biggest risk is forgetting a small payment and getting a 6-year stain on your credit file for a trivial amount.