What You Need To Know About BNPL As Popularity Rises
The popularity of buy now, pay later (BNPL) continues to grow, particularly among young adults in the UK, with half of Gen Z now using this payment option whenever it is available, according to TransUnion . The latest research from the global information and insights firm – one of the UK’s leading credit reference agencies – examines changing consumer habits and shows that six in 10 (64%) people aged 18-24 use buy now, pay later services.
Along with increased demand to buy now, pay later, research shows a strong appetite for credit from this generation, with 42% saying they plan to apply for new credit or refinance existing credit in the coming year. coming year – well above the 27% average for UK consumers. Kelli Fielding, Managing Director of TransUnion Consumer Interactive, said, “Young adults are likely to turn to credit to help them through life stages that have been put on hold for the past two years – whether either for major purchases, such as buying a car, or leaving the family home – as well as for day-to-day finances.
“Along with this, it’s clear to see the growing demand for buy-now-pay-later services, with Gen Z citing the main appeal being interest-free payments (70%), as well as spreading costs over time (62 %) and ease of use at checkout (54%) which is much more important for this age group than for the others.
Buy now, pay later Finance hit £6.4bn transaction value in 2021, according to industry reports[i] and growth looks set to continue. Kelli Fielding continued, “Starting this summer, buy now, pay later agreements will appear on TransUnion credit reports, helping people better manage their finances. It is important to note that this will have no immediate effect on your credit score. That said, how you manage your payments will be visible to lenders and could be taken into account if you apply for credit, so keeping track of your payments is very important.
Buy now, pay later on your loans and your credit report: here’s what you need to know:
Why is buy now, pay later added to credit reports?
TransUnion includes buy-it-now, pay-later data in credit reports to help people manage their finances and to ensure that payment behavior on buy-it-now, pay-later agreements is visible.
When will this information appear on my credit report?
TransUnion will integrate “buy now, pay later” data into traditional credit reports starting in summer 2022.
How will this affect my credit rating?
There will be no immediate effect on TransUnion’s credit ratings. However, as the data becomes more widely used, TransUnion will update its credit rating as appropriate.
Why are things changing?
People need to have as much choice as possible when it comes to finding financing that suits their needs and on affordable terms. Including buy-it-now and pay-later data in credit reports will help consumers and lenders make informed credit decisions.
Will buy now, pay later purchases made in the past show up on credit reports?
Providers will notify customers that their data is shared with TransUnion before it appears on their credit file and may confirm the dates from which it will apply.
If I miss a purchase now, pay later, will that affect my credit rating?
Credit scores won’t be affected initially, but missed payments would be visible to lenders and could affect your ability to borrow, so it’s very important to keep repayments as agreed.
Will credit checks now be used when I apply for buy now, pay later financing?
Buy now, pay later Funding checks will be posted on your TransUnion credit report and will be visible to other lenders. However, these verifications will be presented to lenders in a different way from the traditional in-depth searches, typically used for things like mortgages, credit cards and loans, or informal searches, often used for quotes and verifications of eligibility before credit is granted. It will be up to each finance provider to decide how they will use these new checks in their lending decisions.