How Buy Now, Pay Later (BNPL) Services Like Afterpay & Zip Now Affect Your Credit Report – And What You Can Do About It

At Mortgage Base Finance, our job isn’t just to find you the right loan — it’s to help you stay financially informed. If you’ve used Buy Now, Pay Later (BNPL) platforms like Afterpay, Zip, Klarna, or Humm, there are some major changes you need to know about. As of 2024, BNPL services are now officially regulated under Australian credit laws, and these changes could have a significant impact on your credit report and borrowing potential.

Here’s what you need to know — and how to protect yourself.

BNPL: What’s Changing in 2024 and Why It Matters

In recent years, BNPL services became a popular way for Australians to split purchases into instalments without upfront interest. While it may have seemed harmless (and often wasn't listed on credit reports), that’s no longer the case.

As of mid-2024, the Australian Government passed legislation that brings BNPL under the National Consumer Credit Protection Act 2009. In simple terms, BNPL is now legally recognised as a form of credit — and providers must comply with the same responsible lending obligations as credit card or personal loan lenders.

This is big. Because now:

• BNPL accounts can appear on your credit report.

• Missed payments can negatively affect your credit score.

• Lenders will be able to see your BNPL usage when assessing you for a mortgage or loan.

How BNPL Services Affect Your Credit Score

Before the new laws, most BNPL platforms didn't report your usage to credit reporting agencies unless your account went into collections. Now, your activity may show up whether you’re on top of your payments or not.

Here’s how it can impact your credit score:

1. Number of active accounts: Opening multiple BNPL accounts in a short time can raise red flags for lenders. It may signal that you rely on short-term credit to cover everyday purchases.

2. Payment history: Missed or late repayments are now more likely to be reported. Even one default can damage your score.

3. Credit enquiries: Applying for BNPL could count as a credit enquiry. Multiple enquiries in a short period can reduce your creditworthiness.

4. Credit limits and utilisation: While BNPL platforms don’t usually have traditional credit limits, the amounts you owe are still considered liabilities — and will factor into your borrowing capacity.

   
   

Why This Matters for Your Mortgage or Loan Application

At Mortgage Base Finance, we assess every part of your financial picture when helping you secure a mortgage. And so do lenders.

If you’re applying for a home loan or refinancing:

• High BNPL usage can reduce your borrowing power.Lenders may lower the amount you can borrow if you have ongoing BNPL debts.

• Your risk profile may increase.Frequent BNPL use can be interpreted as poor budgeting or financial stress, particularly if it’s used for everyday items rather than emergencies.

• Missed payments hurt your application.Any negative listings (defaults or late payments) on your credit file — including BNPL — can delay or derail your home loan approval.

What You Can Do to Limit the Damage

BNPL isn’t inherently bad. Used responsibly, it can help you manage purchases without interest. But with these new changes, it’s critical to treat it like any other form of credit.

Here are practical ways to protect your credit health:

1. Limit the Number of BNPL Accounts You Hold

Stick to one BNPL provider if you need to use it. Multiple accounts increase complexity and the chance of missed payments.

2. Pay On Time, Every Time

Set up direct debits or calendar reminders to ensure payments are made on or before the due date. Just one missed payment could now harm your credit score.

3. Don’t Use BNPL for Non-Essential Spending

If you're using BNPL regularly for takeaway, clothes, or impulse buys, it might be worth rethinking. Budgeting for these items upfront helps you stay in control — and improves your financial profile.

4. Check Your Credit Report

Visit My Credit File (Equifax) or CheckYourCredit (illion) to get a free copy of your report. Look for BNPL listings and verify their accuracy.

5. Close Unused BNPL Accounts

If you no longer use a platform, consider closing the account to avoid potential ongoing liability or confusion over automatic charges.

6. Avoid Applying for Credit While Carrying BNPL Debts

Lenders will factor in your BNPL liabilities — even if you’re not paying interest. Pay off BNPL balances before applying for a loan to maximise your borrowing capacity.

7. Speak With Your Broker Before Applying

If you’re unsure how your credit history (including BNPL) will affect your chances of getting a loan, speak to us at Mortgage Base Finance. We’ll help you understand where you stand and what steps to take.

Who Is Most at Risk?

The new rules are designed to protect consumers — but they also expose riskier behaviour. Those most affected include:

• Young adults and students who use BNPL for everyday purchases

• People living paycheck to paycheck who rely on BNPL to cover gaps

• Borrowers with existing credit issues who now have additional listings on their credit file

If you’re in one of these groups, it’s essential to take control of your BNPL usage now.

What Lenders Will Look for Now

Lenders will start asking questions like:

• “How many BNPL accounts do you have?”

• “What are your outstanding BNPL liabilities?”

• “Do you have any missed BNPL payments?”

They’ll also scrutinise your bank statements for BNPL repayments — and factor them into your living expenses.

Even though BNPL repayments are often small, they can still affect your serviceability (the amount of income available to meet loan repayments). In tight lending conditions, this can make or break your approval.

In Summary: Treat BNPL Like Credit – Because It Is

The new regulations mean you can no longer treat Buy Now, Pay Later services as “off the books.” They are credit. They do affect your credit report. And they will be taken into account when you apply for a mortgage, personal loan, or refinance.

At Mortgage Base Finance, we recommend that all clients review their BNPL usage and clean up any potential issues before applying for finance. A few simple steps now can make a big difference to your long-term borrowing power.

Need help understanding how your BNPL history affects your home loan eligibility? Contact Mortgage Base Finance today — we’re here to help you navigate the new rules with confidence.