Affirm to Report All Pay-Over-Time Loans to TransUnion

Affirm will begin reporting all its pay-over-time loans to TransUnion, beginning with those issued May 1.

The buy now, pay later (BNPL) provider’s expanded credit reporting will include its Pay in 4 and longer-term monthly installments, the companies said in a Tuesday (April 22) press release.

While consumers will see details about all Affirm transactions on their TransUnion credit file, the transactions will not be visible to lenders and will not be factored into traditional credit scores, according to the release.

However, as new credit scoring models are developed, the information may factor into consumers’ credit scores in the future, per the release.

“Including all loans in a consumer’s credit profile is a crucial step toward making Affirm’s honest financial products even more mainstream,” Affirm President Libor Michalek said in the release.

Fifty-three percent of consumers who have not used BNPL said they would be likely or very likely to use it in the future if it could help their credit scores, according to the release.

“Affirm’s loan furnishing to TransUnion is an exciting milestone for the industry,” Steve Chaouki, president of U.S. Markets and Consumer Interactive at TransUnion, said in the release. “Millions of consumers use Affirm’s pay-over-time financing, and they deserve to get credit for their payment behavior.”

Affirm will also work with other industry stakeholders to standardize the policies for furnishing information across loan products, according to the release.

The company said in March that it would begin furnishing information about all its payment plans to Experian on April 1. With this move, Affirm expanded its credit reporting to Experian to include its pay-over-time products, in addition to the monthly installments of longer-term loans it already reported to the credit reporting agency.

BNPL is evolving into a trusted, ubiquitous service, Affirm founder and CEO Max Levchin said in the PYMNTS eBook, “The Future of the Pay-Later Economy.”

“Our appeal is not that it’s some cool way of borrowing money,” Levchin said. “It’s the sense of control around the schedule and the plan that you create.”

The acting head of the Office of the Comptroller of the Currency, Rodney Hood, said in March that alternative data has value in credit scoring and that FinTech tools can help banks explore customer data that can facilitate bank lending decisions.