Rapid Finance on 22 February 2022

How 'buy now pay later' type loans could affect your credit score

At Rapid Finance, we have access to an extensive list of loan options that can be tailored to your budget, situation and needs. As loan specialists, we know that applying for a loan can be stressful, but we make it easy - whether or not you have a good credit score.

With so many ‘buy now, pay later’ type loans around at the moment, it’s important to keep updated with the relevant information so that you can make the most of your situation without getting caught out.

What is BNPL?

Buy now, pay later (BNPL) services allow you to purchase products or services straight away, and then pay off what you owe in instalments over weeks or months at a time. The reason they’re so popular is that you don’t have to pay interest, as long as you pay off the instalments on time. That’s because the retailer pays the BNPL service a fee of generally between 4-6% of the retail price, for processing the sale.

Do ‘buy now pay later’ services check your credit score?

Most BNPL services don’t need to check your credit score or even verify your income, making it super easy to sign up compared to a credit card, car loan or personal loan.This is because it does not generally fall under the National Consumer Credit Act as interest is not charged on the facility 

Can a buy now pay later loan affect your credit score?

Buy now pay later loans could affect your credit score and could have a negative impact if you either open too many BNPL accounts or fail to pay on time. Essentially, lenders might be concerned about your ability to repay your loan if you have lots of buy now pay later accounts – Defaulted payments (or dishonours) on your bank statements also affects your chances of obtaining a loan. The good news is, that even if your credit score isn’t perfect, there’s generally a loan out there for everyone.

Another thing to note is that not all buy now pay later service providers report your account activity (eg payment history) to the three credit bureaus in Australia, and sometimes the BNPL do not report at all.

 How buy now pay later type loans could affect your credit score


Consumer credit regulation in Australia says that lenders must check whether a person can repay any loan they apply for. If a lender sees that you have multiple BNPL accounts over the past six months, you could be a higher risk borrower than someone who doesn’t.

At Rapid Finance, we have decades of loan experience and, even if you have bad credit, our team of experts will try to help you find the right bad credit loan. Whether you are ex bankrupt, have a poor credit rating, have previously been declined a loan or simply want debt consolidation, we should be able to help.

Buy now pay later credit limits

When you apply for a loan and you have a credit card limit with, say, $15,000, the lender takes this into consideration even if you owe nothing on that card as you may draw on it at some time in the future. If someone had lots of credit cards, depending on their affordability, they’re less likely to get a loan than someone with just one card. (This does depend on the customers' overall profile and affordability)

In the same way, BNPL also generally provides shoppers with a credit limit, which means you may not be able to borrow as much as you hoped when you apply for a loan.

We make it easy for you

When applying for any loan, your whole circumstance is taken into account and, often, people don’t realise that less than perfect credit doesn’t mean “no” to a loan. Rapid Finance has access to an extensive range of finance products. Every single application is different and is based on your overall profile/circumstances– not just how many credit cards you have or whether you’ve signed up to a BNPL service.

Whether you need to purchase a new set of wheels, book that dream wedding or refinance your home, we use a simple process to help find the perfect loan for you. We also check your credit history for mistakes (which can happen) and correct them for you.


Give us a call on 1300 467 274 or apply online today.