Does buy now pay later hurt your credit score and what happens if you miss payments

Buy now pay later has gone from a niche option on a fashion website to something you see at almost every checkout. Recent research by a national advice charity found that more than one in four adults expect to use it for seasonal spending, with the figure even higher for parents of primary school children.

For some people it is a handy way to spread the cost of a purchase. For others, it quietly builds up into a problem that affects their credit file and makes it harder to borrow in future.

This guide answers the big questions people are asking right now about buy now pay later.

What buy now pay later actually is

Buy now pay later (BNPL) is a way of borrowing that lets you get goods or services now and pay later, usually in instalments. Money guidance services describe it as a form of short term credit, even where it looks like a simple payment option at the checkout.

Typical features include:

• pay in 30 days, or
• pay in three or four instalments, or
• use an app that gives you a running spending limit which you then repay over time.

Some agreements are completely interest free if you pay on time. Others charge interest or late fees. The details vary a lot between providers.

At the moment, some BNPL agreements are regulated as consumer credit and some are not. That is changing. In 2025 the government confirmed that a type of agreement called deferred payment credit (which includes many BNPL deals offered by third party lenders) will come under the financial regulator from mid 2026. Consultation papers and regulator updates say this will bring in rules on affordability checks, clearer information and the right to complain to the ombudsman if something goes wrong.

In other words, even if the checkout makes it look casual, BNPL is still borrowing.

Does buy now pay later show on your credit report

Many people assume that because BNPL feels informal, it does not appear on their credit history. That is becoming less true.

Money guidance articles and credit reference agencies explain that:

• BNPL is a credit agreement and some providers already report your payments to credit reference agencies.
• In recent years, major agencies have started adding BNPL data to credit files, particularly for app based services.
• Even where it does not yet change the headline credit score number, lenders may be able to see BNPL use when they look at your file and factor it into their decisions.

For example, a credit score guide from a national money guidance body lists BNPL alongside credit cards and overdrafts as something that can appear on your report. It notes that while the score might not move straight away, some lenders will look at how often you use BNPL when deciding whether to offer you new credit.

News from comparison and consumer sites has also highlighted that major agencies have begun adding BNPL accounts and searches to people's files, so that future lenders can see them alongside more traditional borrowing.

The important point is this:

You should assume BNPL can affect how lenders see you, even if it does not always show up as a traditional loan.

Can buy now pay later hurt your credit score

Used carefully, small BNPL purchases that are always paid on time are unlikely to wreck your credit score on their own and may even help show good payment behaviour where providers report them.

But there are several ways BNPL can damage your credit position:

1. Missed or late payments
   Guidance from credit information sites and money help services is clear that if you miss payments:

   • you can be charged late fees
   • the provider may mark payments as late or missed on your credit file
   • if the debt is passed to collectors or legal action is taken, this can seriously damage your score and stay on your file for years.

2. Using BNPL on top of other borrowing
   The Money and Pensions Service has warned that many people who use BNPL are also juggling overdrafts, credit cards and loans. Lenders looking at your file may see lots of overlapping BNPL agreements as a sign of financial stress, even if you have not missed a payment yet.

3. High reliance on BNPL for essentials
   Citizens Advice has reported that a growing share of people are using BNPL to spread the cost of everyday goods, not just occasional treats. If a lender sees heavy ongoing use of BNPL for basics, they may be more cautious about offering further credit.

4. Hard searches and new account openings
   Some BNPL providers carry out searches that can appear on your file when you sign up. Opening several new agreements in a short space of time can make you look riskier to some lenders.

In short, the more you lean on BNPL and the more stretched you are, the higher the chance that it will start to count against you.

What actually happens if you miss a buy now pay later payment

Missed payments are where many people get caught out. Advice services and BNPL help pages describe a similar pattern:

• Late fees and interest
  Many schemes charge a late fee if you miss a payment. Some will also start to charge interest if the balance is not cleared.

• Demand to pay everything at once
  Some providers have the right to ask for the full remaining balance immediately after a missed payment, which can be a shock if you were expecting to spread it over several months.

• Account suspension
  Your BNPL account or app may be frozen so you cannot use it for further purchases.

• Debt collection
  If you ignore reminders, the debt can be passed to a collection agency. This usually adds extra fees and puts more pressure on you.

• Credit file damage
  Guidance from health and money information sites warns that missed BNPL payments can be reported to credit reference agencies. That means they appear on your record in a similar way to missed credit card or loan payments and can make future borrowing more difficult.

Providers and advice organisations all stress one thing: if you are going to struggle to pay, contact the BNPL firm before the payment is due. Some will reduce payments, move dates or give you temporary breathing space if you explain the problem early.

Why buy now pay later has become a cost of living issue

BNPL is no longer just about spreading the cost of a pair of trainers. Research from the Money and Pensions Service and Citizens Advice shows that:

• millions of adults have used BNPL in the last year
• a large share of users are younger adults and people already on tight budgets
• many use it to cover seasonal spending and, increasingly, everyday essentials.

When prices for food, energy and rent are high, BNPL can feel like a pressure valve. But because it is still debt, it can quickly pile up:

• several small purchases turn into multiple simultaneous payments
• different providers are paid on different days, making budgeting harder
• missing just one payment can trigger charges and collection action.

Debt charities have warned that unregulated BNPL has, in some cases, pushed people deeper into problem debt, which is one reason they have long called for tighter rules.

What new rules are coming and how they affect you

In 2025, government and the financial regulator set out plans to bring most third party BNPL lending fully into consumer credit regulation.

Key points from official papers and consultation documents include:

• From mid 2026, most deferred payment credit agreements offered by specialist BNPL lenders through merchants will come under the regulator's rules.
• Lenders will have to carry out proper creditworthiness and affordability checks, even on smaller purchases.
• Borrowers will have to be given clearer pre contract information so they understand what they are signing up to.
• BNPL customers will gain the right to complain to the Financial Ombudsman Service if the lender treats them unfairly.
• Lenders will have to offer support to people in financial difficulty, in line with rules that already apply to other types of credit.

For everyday users, this means BNPL will look and feel more like other regulated borrowing. There should be better protection if something goes wrong, but also more checks before you are accepted for an agreement.

Signs that buy now pay later might be going wrong for you

Money guidance bodies and advice agencies suggest watching for warning signs such as:

• using BNPL most months to cover essentials rather than occasional purchases
• having payments to three or more BNPL providers coming out of your account
• regularly moving money around between cards and BNPL just to stay afloat
• ignoring emails or notifications from providers because you feel overwhelmed
• having to borrow again straight after payday because BNPL payments have wiped out your cash.

If any of these sound familiar, it is a sign to pause and take stock.

How to use buy now pay later more safely

If you decide to keep using BNPL, these steps from money guidance services can reduce the risk:

1. Treat it like any other credit
   Before clicking, ask yourself whether you would be happy putting the same purchase on a credit card or taking a small loan for it. If the answer is no, BNPL is probably not a good idea either.

2. Have a clear repayment plan
   Check the exact dates and amounts of every instalment. Put them in a calendar or budgeting app so they do not clash with rent, energy or council tax.

3. Limit how many BNPL deals you run at once
   Setting your own rule, such as never having more than two BNPL purchases open at the same time, can stop things from quietly building up.

4. Avoid using several BNPL providers at once
   Different apps and lenders mean different payment dates and logins. Sticking to one provider (if you must use BNPL at all) makes it easier to track.

5. Turn off one click options where you can
   Some apps encourage impulse spending. Turning off instant approval or deleting saved cards can slow you down and give you time to think.

6. Read the small print on fees and charges
   Check what happens if you are late. Some providers charge flat late fees, others start adding interest, and some may both.

What to do if buy now pay later is already causing debt problems

If you are already struggling with BNPL, the most important thing is not to ignore it.

Practical steps drawn from advice services include:

1. Talk to the BNPL lender
   Explain that you are having difficulty. Ask if they can:

   • move payment dates to match your income
   • spread the balance over a longer period
   • freeze interest or late fees while you get help.

2. Stop using BNPL for new purchases
   It is tempting to use another BNPL deal to get through the month, but that usually makes the problem worse.

3. Check your overall budget
   Free budgeting tools from money guidance organisations can help you work out what is coming in, what must go out, and what is left for debts.

4. Get free, independent debt advice
   Organisations such as Citizens Advice, StepChange and National Debtline can:

   • help you prioritise between BNPL and other debts
   • talk to lenders on your behalf
   • explain options such as payment plans or, in more serious situations, formal debt solutions.

They are used to dealing with BNPL alongside overdrafts, cards and other borrowing, and can help you see the whole picture.

Key points to remember

• Buy now pay later is real borrowing, not just a casual way to split payments.
• Some BNPL use already appears on credit files, and more is likely to do so as reporting expands and new rules come in.
• Using BNPL occasionally and paying on time is unlikely to cause major damage on its own, but relying on it regularly or missing payments can harm your credit position.
• Missed BNPL payments can lead to fees, debt collection and lasting marks on your credit history.
• From 2026, most third party BNPL lending will be brought fully into consumer credit regulation, with stronger checks and new rights for borrowers.
• If BNPL is starting to feel like a problem, talk to the lender early and get free advice from a reputable debt charity rather than letting the situation spiral.

Treating BNPL with the same caution you would give any other form of credit is the best way to protect both your day to day budget and your future borrowing options.