How Buy Now, Pay Later Could Affect Your Credit and Mortgage Readiness

In today’s digital-first world, many buyers use Buy Now, Pay Later (BNPL) services like Klarna, Afterpay, or Affirm to spread out payments on everyday purchases. While convenient, these tools are now influencing your credit — and that can impact your ability to qualify for a mortgage.

Here’s what you need to know.

FICO Now Includes BNPL in Credit Scores

The FICO Score 10 BNPL and FICO Score 10T BNPL models now include BNPL data in your credit file. That means how you use these services can either help or hurt your credit score — and lenders will see that when reviewing your mortgage application.

This change reflects just how mainstream BNPL has become, and why it's critical to understand how it fits into the bigger picture of your financial profile.

Creditworthiness: The Good and the Not-So-Good

BNPL could benefit you if:

• You make all your payments on time

• You use these services occasionally and maintain low balances

• You already have strong, established credit

BNPL could hurt you if:

• You miss payments or carry multiple BNPL balances

• You frequently open new BNPL accounts

• These payments increase your monthly obligations too much

Since BNPL activity is now reported to credit bureaus, it becomes part of your payment history — and your future lenders will be paying close attention.

Debt-to-Income (DTI) Ratio: Why It Matters

Mortgage lenders use your DTI ratio to determine how much house you can afford. It compares your monthly debt obligations to your gross income. BNPL payments now count toward that total.

Here’s why that matters:

• Even small BNPL payments can raise your DTI

• A higher DTI can reduce the loan amount you qualify for

• In competitive markets, lower DTI = better terms and faster approval

If you have multiple BNPL accounts and you're carrying balances, it could affect your borrowing power more than you realize.

Planning to Buy Soon? Here’s What to Do Now

If homeownership is on your radar, consider these steps to stay financially strong:

• Pay off BNPL balances in full whenever possible

• Avoid opening new BNPL accounts during your home search

• Monitor your credit report and understand how BNPL shows up

• Work with a lender early to check your credit and DTI ratio

I work closely with Speak Straight Mortgage, a local lender I trust to guide buyers through their credit and pre-approval process. You can learn more or reach out to them directly here: Speak Straight Mortgage

Resources to Help You Get Started

Check Your Credit Report:
You’re entitled to one free report annually from each bureau.
Visit: www.AnnualCreditReport.com

Estimate Your DTI:
Use this helpful calculator from NerdWallet:
https://www.nerdwallet.com/article/mortgages/dti-calculator

Connect with a Lender You Can Trust:
Reach out to Speak Straight Mortgage for a personalized credit and mortgage readiness review.

If you're thinking about buying a home in Colorado Springs or planning a move in 2025, I’m always here to help you prepare smartly and strategically. Reach out anytime. Let's make your next move your best one yet.