A Big Change Is Coming to Credit Scores in Fall 2025

If you’ve ever used services like Afterpay, Klarna, or Affirm to split purchases into smaller payments, there's a new development you need to know about—especially if you’re planning to buy a home.

Starting in Fall 2025, FICO will begin incorporating Buy Now, Pay Later (BNPL) activity into your credit score. This marks a major shift in how your borrowing behavior is evaluated—and it could directly impact your ability to get approved for a mortgage.

Let’s break down what’s changing, how it might help (or hurt), and what you can do now to stay ahead of the game.

What Is Buy Now, Pay Later?

Buy Now, Pay Later (BNPL) is a payment method that allows consumers to split purchases into installments—often interest-free. Popular BNPL providers include:

• Afterpay
• Klarna
• Affirm
• PayPal Pay Later
• Zip

While convenient, these services haven’t traditionally shown up on credit reports. That’s changing—fast.

What’s FICO Doing (and Why Does It Matter)?

FICO, the most widely used credit scoring model in mortgage lending, is now treating BNPL accounts as part of your credit profile.

Here’s how it can affect you:

Positive Impact

• Builds credit history for those with limited credit (like Gen Z or first-time buyers)
• Improves score when BNPL payments are made on time

Negative Impact

• Late or missed payments can drop your score
• Too many open BNPL accounts may look like overextension
• Score volatility during the mortgage process, especially if a new BNPL item reports before closing

What This Means for Homebuyers

If you're in the market for a home—or plan to be in the next 6–12 months—this update is especially important.

Your credit score affects:

• The interest rate you qualify for
• Whether you can access down payment assistance
• Which loan products (FHA, VA, Conventional, etc.) are available to you

A last-minute score drop from a BNPL account could delay your loan—or even derail your approval altogether.

Pro Tip from Sherry: “I’ve seen buyers lose access to down payment help because their score dipped just a few points. These new BNPL reports could cause that exact kind of shift if we’re not proactive.”

What Should You Do Now?

Whether you’re a buyer, homeowner, or just financially curious, here’s how to stay ahead of the FICO update:

1. Review Your Credit Report

Use free services or request a soft pull through a lender to check if BNPL accounts have started to report.

2. Avoid New BNPL Activity

If you're planning to buy a home soon, hold off on new purchases using BNPL platforms to keep your credit profile stable.

3. Get a Mortgage Readiness Check

At The Sherry Riano Team, we offer a complimentary Mortgage Readiness Quiz to help you determine where your credit and finances stand—and what adjustments to make before applying.

Take the Mortgage Readiness Quiz

For Realtors and Financial Partners

This is a great moment to educate your buyers. Many consumers are using BNPL monthly and have no idea it could now impact their credit—and their home financing.

Partnering with a lender who actively tracks these changes ensures your clients are prepared before surprises happen.

We’re happy to co-host workshops, Q&A sessions, and credit checkups with your buyers or team.

Final Thoughts: Knowledge Is Your Best Tool

This FICO update isn’t just a tech tweak—it’s a shift in how creditworthiness is measured.

For some, it’s an opportunity to build credit responsibly.
For others, it’s a cautionary tale to pause, assess, and plan smarter.

At The Sherry Riano Team, we believe mortgage success starts before the application. And we’re here to guide you every step of the way.

Ready to Talk?

If you're planning to buy, refinance, or just want clarity around your credit situation—reach out.

We’re licensed across the Southeast and offer:

• Conventional, FHA, VA, USDA, Renovation & DSCR Loans
• Jumbo and Second Home Mortgages
• First-Time Buyer & Down Payment Assistance Programs
• Credit education and pre-approval planning

Let’s get you mortgage-ready—with zero surprises.

👉 Visit Our Website
📞 Or call us today at 919-234-7415

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