Buy Now Pay Later: How can you put a score on your credit score, know the option of payment later

Buy Now Pay Later: Nowadays, while making online payments, you always see an option ‘buy now, pay later’ i.e. Buy Now Pay Later (BNPL). This is an emerging online trend being seen in the last 2-3 years. Though these plans offer instant, no-cost financing, did you know that this can affect your credit score? Today we will tell you what happens to BNPL in credit score.

Credit score is the benchmark for loan creditability
Credit score is an important benchmark for financial institutions to understand the loan creditworthiness of an individual in India. Credit score is a number measured between 300 and 900 and is calculated by credit information companies in India.

BNPL’s craze is more among such people
BNPL is increasingly being used by those who do not have a strong credit history or are not qualified for a credit card. Along with this, the craze of BNPL is also being seen among people who are not able to afford credit cards at cheap rates and are unable to get loans in a traditional way.

What do market experts say
Market experts say that this is because BNPL can also be given to individuals with low credit scores. BNPL has attracted the attention of both the regulators and the credit industry and is soon expected to play a major role in the credit score of the consumers. It is believed that BNPL will focus more on those areas which do not have access to the loan market, this can be a good way for one to start their credit profile.

Market experts say that the traditional loan method cannot be completed without a more complicated and lengthy process of documents and lesser chances of getting a logon if the credit score is low, whereas in the case of BNPL it is not the case. .

However, it is important to check that before availing BNPL, what are the other risks involved in this option.

BNPL is a personal loan and it has to be repaid.
Depending on the type of plan that individuals opt for, they may be charged some fee and interest if they fail to make the payments on time.
There is always a risk of overspending and overspending through BNPL, which can adversely affect the credit score.

Thus, before taking a loan through BNPL, individuals must ensure that they are not putting their credit score at risk.

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