Experian’s Buy Now Pay Later Bureau™ will provide lenders with real-time reports, scores and attributes
COSTA MESA, California, January 27, 2022–(BUSINESS WIRE)–In an effort to protect the financial health of consumers, Experian® today announced its plan to bring more transparency to the growing buy now, pay later (BNPL) industry. In Spring 2022, Experian will launch The Buy Now Pay Later Bureau™, a first-of-its-kind specialist bureau that will provide visibility so lenders can contribute to greater financial inclusion and better assess risk while preventing negative impact on consumer credit scores.
Many consumers appreciate the ease of access, flexibility and choice that BNPL loans provide. In fact, 45 million Americans used BNPL products in 2021 and spending on BNPL has increased 230% since the start of 2020.1.
Although Experian has worked with some of the largest BNPL providers since 2016, the majority of BNPL accounts are not reported to credit bureaus because the most commonly used scoring models today are designed to predict risk based on payment behaviors of traditional credit products, not BNPL accounts.
“Our mission is to drive financial inclusion while ensuring responsible lending and we believe BNPL payment reporting plays a critical role in achieving this,” said Greg Wright, executive vice president and chief product officer for Experian Consumer. Information Service. “At the same time, we are committed to giving BNPL’s suppliers the confidence that they can provide information to us without negatively impacting consumer credit scores. We are confident that we have found a solution with The Buy Now Pay Later Bureau which will help protect consumers’ credit scores while bringing more transparency to the industry.”
The Buy Now Pay Later Bureau will allow BNPL providers to provide data on all types of point-of-sale products, enabling a comprehensive view of consumer payments, including the number of BNPL loans in progress, total loan amounts BNPL and BNPL payment status. To protect consumers’ credit scores from immediate negative impact, detailed information relating to each BNPL transaction will be stored separately from Experian’s central credit bureau data.
Bringing more transparency to the financial services sector
Justified concerns about the negative impact on consumer credit ratings have prevented many BNPL providers from releasing information. In turn, this has prevented traditional lenders from having a complete view of consumers’ financial obligations.
Experian’s one-of-a-kind specialist desk will provide real-time consumer BNPL activity reporting as well as Fair Credit Reporting Act (FCRA) regulated scores and attributes for BNPL providers and traditional lenders to use to make instant and accurate credit decisions. . By gaining a more comprehensive view of consumers’ BNPL repayment behaviors, lenders can provide low profile or subprime consumers who would otherwise be denied credit with a first or second chance.
To learn more about The Buy Now Pay Later Bureau, visit www.experian.com/bnpl.
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