Take Control: Why “Pay Later” Might Cost You More

In June, FICO—the major credit scoring company—announced it’s starting to include “buy now, pay later” (BNPL) data in its credit scoring models. At first glance, that might seem like good news. If you’re making those payments on time, it should help your credit score, right?

Well… not exactly.

According to Mansa Musa from Moneysmartlife.org, there are some hidden risks with these short-term loans that don’t get talked about enough.

One thing to keep in mind: the length of your loans also makes up about 15% of your credit score. So even if you’re making your payments on time, short-term loans like BNPL don’t stay on your credit report very long—which means they don’t help build the kind of long-term credit history that really boosts your score.

So, before you click “pay later,” listen below.

Each Tuesday, catch up with Mansa Musa from MoneySmartLife.org and host Randi Myles to help empower, “sustainable financial well-being for working class families.”