Experian Announces Plans to Launch Buy Now Pay Later Bureau

Experian recently announced plans to launch ‘The Buy Now Pay Later Bureau,’ a specialty bureau created to promote responsible and inclusive lending, which the company says it hopes will bring more transparency to the buy now, pay later (BNPL) industry. Launching later this spring, Experian says the specialty bureau will provide lenders with real-time reporting, scores, and attributes to better assess consumers.

“Our mission is to drive financial inclusion while ensuring responsible lending and we believe the reporting of BNPL payments plays a critical role in achieving this,” said Greg Wright , executive vice president and chief product officer for Experian Consumer Information Services. “At the same time, we are committed to giving BNPL providers the confidence they can report information to us without negatively impacting consumer credit scores.”

The Buy Now Pay Later Bureau will allow lenders to furnish data on all kinds of products, allowing them to see consumers’ outstanding BNPL loans, payment status, and total BNPL loan amounts. Detailed information about each BNPL transaction will be stored separately from Experian’s core credit bureau data to protect credit scores from negative impact.

In recent years, the BNPL loan industry has risen sharply with many consumers increasingly using BNPL products for their purchases. 45 million Americans used BNPL products in 2021 and spending on BNPL has grown 230 percent since January 2020. However, the lack of consumer insights on BNPL loans creates challenges for lenders during credit decisioning, which Experian plans to resolve.

Experian’s bureau will provide real-time reporting of consumers’ BNPL activity and Fair Credit Reporting Act (FCRA) regulated scores so lenders can make instant and accurate credit decisions. Because lenders will have a more complete view of consumers’ BNPL activity, they can provide credit for subprime or thin-file consumers who would typically be denied.

“We are confident we have found a solution with The Buy Now Pay Later Bureau that will help protect consumer credit scores while bringing more transparency to the industry,” Wright said.