By now, pay later loans have helped many people stretch their budgets by paying off purchases through installments. But soon, you’ll see those loans on your credit report.
WATCH BELOW: ‘If you’re not paying it well, unfortunately, you will be penalized for it,’ Thomas Nitzsche tells WPTV
Shoppers in downtown Stuart, like Jenai Elhajj sometimes uses those loans when online shopping.
“A lot of people don’t have the necessary funds to make a higher purchase,” said Elhajj. “This gives you that opportunity to be able to get what you want, or what you need, and then make payments on it.”
FICO, a credit score service, just announced it will incorporate a shoppers’ payment history on these loans to help determine credit scoring.
Porche Price uses these loans—such as Affirm– during the holidays.
“I think it’s a great idea,” she said.
WPTV’s Tyler Hatfield dug deeper into why FICO will use these loans to find credit worthiness and spoke to Thomas Nitzsche at Money Management International.
“There’s been really astronomical increases in people using these types of loans,” he said.
According to a 2025 survey by LendingTree, 49% of Americans have used a by now, pay later loan at least once.
Before, Nitzsche said the data from these loans was never reported to credit bureaus.
“Financial institutions don’t have a good picture of how much you have in financial obligations every month or whether you’ve paid timely on those or not,” he said.
Nitzsche said if you pay the loans timely this change can help.
“This is a good opportunity for customers, consumers, to improve their credit and demonstrate good credit worthiness on those lines of credit,” he said.
However, Nitzsche said it also works the other way.
“If you’re not paying it well,” he said. “Unfortunately, you will be penalized for it.”
Nitzsche said younger Americans could use it as a way to build new credit.
“It does open up a sort of a new opportunity to have,” he said. “A credit builder product, so to speak.”
However, this change won’t happen immediately. FICO said it’ll start fall 2025.
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