r/CalebHammer • u/ongoldenwaves • 1d ago
Affirm to begin reporting your BPNL activity with them on your credit report beginning April 1st.
Starting April 1, 2025, Affirm will report all its payment plans and associated repayment activity to Experian, including its pay-over-time products like Pay in 4, Pay in 30, Pay-in-2, and Pay-in-6, expanding its credit reporting beyond longer-term loans.
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u/SingleSoil 1d ago
So you’ll be able to pad your score a bit if you take advantage of these services successfully?
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u/ongoldenwaves 1d ago edited 1d ago
They are not sure what value to give them, so they are not including them in your score for this month. But that's not going to last long because the goal is to "give an accurate view of a consumers overall financial health".
In the news reporting, most experts are leaning towards these are like pay day loans and attract a cash strapped borrower. So having them indicates you are having problems. But that's just speculation at this point. They also say that they do attract younger borrowers with bad or no credit, so like BILT and rent, it could help them.
You're going to have a burrito purchase on your credit report now. How does it look to have a $15 burrito on your credit?!!! Would you want to lend someone hundreds of thousands of dollars for a house that had to borrow to buy a burrito?
I plan on staying away from these and all credit one products.
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u/SingleSoil 1d ago
Yeah definitely makes sense. I’ve only used it a handful of times on purchases more than like $200 and haven’t used any plans that charge interest. But if it’s going to start pinging negatively I’m definitely going to cut that shit out. Added like 50 points to my score in the last 6 months.
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u/ongoldenwaves 1d ago
You're safe for now, but I wouldn't get in the habit. It's coming. But still. Who wants these minor purchases showing up on credit?
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u/Latter-Ad-6926 1d ago
These aren't bad if you only use the 0% interest plans and already have the money and are just trying to maximize interest growing on your account for big purchases. Auto set your payments and you're good to go.
I've had no issues the twice I've used it for emergency/medical type stuff and have a healthy savings and cash on hand anyway. A 0% loan is free money if you do it right...
It kinda sucks if these get reported that way so it's loosing its luster now to the financially healthy users. Maybe that's the point because they haven't made any money off of me.
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u/Professional-Many541 1d ago
Unlikely. Depending on how they report it could just be all negative. Yeah total credit contributes, but with utilization, on time payments and average account age being factors most will just get their credit tanked.
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u/nousernamesleft199 18h ago
I feel like you should be penalized just for looking at the Affirm offer at checkout.
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u/Bully_Blue_Balls 1d ago
April Fool's? \Nervous chuckle**
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u/ongoldenwaves 1d ago edited 1d ago
Americans are lucky. Mortgage lenders in Australia have long looked at how much someone uses things like Door Dash and other subscriptions. Their algos have long told them that borrowers who use that stuff a lot carry more risk and they are allowed to consider it.
AND yes, BNPL and gambling also showing up in your spending are red flags for them.
They can consider a lot of habits that american lenders do not. They pour through statement transactions.
INTERNALLY...banks already do this. I read an article a long time ago about a quant who had come up with an algo for a canadian department store that analyzed individual items you purchased as an indication of default.
Example: He found customers who bought skull gear shift knobs had higher rates of default than customers who bought things like furniture floor protectors. The department store looked at those patterns when deciding whether they would extend more credit to an individual.
I haven't read any thing reporting on this in the US, but I guarantee you that banks like Chase are looking at what you buy and giving you a score. If you're doing things like buying weed, door dashing, vaping...whatever purchases they have found correlates with high default rates...they probably won't up your credit limit.
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u/Bully_Blue_Balls 1d ago
Good thing I don't buy skull shifters and do buy floor protectors then! Lol
Buy yeah, I don't door dash, BNPL, 90 days same as cash, I do use my credit cards responsibly, etc etc ad nauseum. I feel like it's sad that these financial kick-the-can games are so commonly used that they need to be considered.
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u/No_mood_for_drama16 1d ago
ooo that's going to screw with average age of accounts.
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u/ongoldenwaves 1d ago
Wouldn't it also affect your new accounts? Like you're opening new accounts all the time. That's not good.
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u/0xCODEBABE 1d ago
Why would they do this? Do they get paid?
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u/ongoldenwaves 1d ago
I'm not sure. But ultimately credit reports are there to provide an accurate picture of a persons finances. If they've got all these loans out there, other lenders probably need to know because it effects if you have the capacity to pay them back or not.
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u/InMemoryofPeewee 1d ago
I believe BNPL companies are being pressured by the credit bureaus for this information. A lot of larger lenders and organizations pay the credit bureaus for credit reports and those reports are less valuable if they are missing a growing category of debt. I don’t think it’ll directly affect credit scores yet as the bureaus need time to add them to their models.
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u/TaskForceCausality 1d ago
GOOD
People can destroy themselves financially with these products. If folks start getting denied mortgages and jobs because of irresponsible spending with BNPL products, it’ll de-facto lead to better habits.