Experian’s Industry-first Buy Now, Pay Later Bureau Will Protect Consumer Credit Scores and Provide Real-time Insights to Drive More Inclusive and Responsible Lending

Rhea-AI Summary

Experian is set to launch The Buy Now Pay Later Bureau in spring 2022, aimed at enhancing transparency in the booming buy now, pay later (BNPL) sector. This first-of-its-kind bureau will enable lenders to report real-time BNPL data while protecting consumer credit scores. With 45 million Americans using BNPL in 2021 and a 230% increase in spending since 2020, this initiative addresses the reporting gap that has previously hindered traditional lenders' ability to assess consumers' financial obligations.

Positive

• Launch of The Buy Now Pay Later Bureau will enhance transparency in the BNPL sector.
• Real-time reporting will help lenders better assess risk and promote financial inclusion.
• The initiative allows BNPL providers to report information without negatively impacting consumer credit scores.

Negative

• None.

The Buy Now Pay Later Bureau™ from Experian will provide lenders with real-time reporting, scores and attributes

COSTA MESA, Calif.--(BUSINESS WIRE)-- In a move to protect the financial health of consumers, Experian® today announced its plan to bring more transparency to the rapidly growing buy now, pay later (BNPL) industry. In the spring of 2022, Experian will debut The Buy Now Pay Later Bureau™, a first-of-its kind specialty bureau which will provide visibility so lenders can help further financial inclusion and better assess risk while preventing negative impact to consumer credit scores.

Many consumers enjoy the ease of access, flexibility and choice BNPL loans offer. In fact, 45 million Americans used BNPL products in 2021 and spending on BNPL has increased 230 percent since the start of 2020¹.

While Experian has worked with some of the largest BNPL providers since 2016, the majority of BNPL accounts are not reported to credit bureaus because today’s most commonly used score models are designed to predict risk based on payment behaviors of mainstream credit products, not BNPL accounts.

“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. 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.”

The Buy Now Pay Later Bureau will allow BNPL providers to furnish data on all types of point-of-sale products, enabling a comprehensive view of consumer payments, including the number of outstanding BNPL loans, total BNPL loan amounts and BNPL payment status. To protect consumer credit scores from immediate negative impact, detailed information related to each BNPL transaction will be stored separately from Experian’s core credit bureau data.

Bringing more transparency to the financial services industry

Justifiable concerns about the negative impact to consumer credit scores has prevented many BNPL providers from reporting information. In turn, this has inhibited traditional lenders from gaining a complete view of consumers’ financial obligations.

Experian’s one-of-a-kind specialty bureau will provide real-time reporting of consumers’ BNPL activity as well as Fair Credit Reporting Act (FCRA) regulated scores and attributes that BNPL providers and traditional lenders can use to make instant and accurate credit decisions. By gaining a more complete view of consumers’ BNPL repayment behaviors, lenders can provide thin-file or subprime consumers who would otherwise be denied credit with first or second chances.

To learn more about The Buy Now Pay Later Bureau, visit www.experian.com/bnpl.

About Experian

Experian is the world’s leading global information services company. During life’s big moments — from buying a home or a car, to sending a child to college, to growing a business by connecting with new customers — we empower consumers and our clients to manage their data with confidence. We help individuals to take financial control and access financial services, businesses to make smarter decisions and thrive, lenders to lend more responsibly, and organizations to prevent identity fraud and crime.

We have 20,000 people operating across 44 countries, and every day we’re investing in new technologies, talented people and innovation to help all our clients maximize every opportunity. We are listed on the London Stock Exchange (EXPN) and are a constituent of the FTSE 100 Index.

Learn more at www.experianplc.com or visit our global content hub at our global news blog for the latest news and insights from the Group.

Experian and the Experian trademarks used herein are trademarks or registered trademarks of Experian and its affiliates. Other product and company names mentioned herein are the property of their respective owners.

¹ https://afterpay-corporate.yourcreative.com.au/wp-content/uploads/2021/10/Economic-Impact-of-BNPL-in-the-US-vF.pdf

View source version on businesswire.com: https://www.businesswire.com/news/home/20220127005299/en/

Amanda Garofalo

Experian Public Relations

1 714 460 3739

amanda.garofalo@experian.com

Source: Experian

FAQ

What is The Buy Now Pay Later Bureau from Experian?

The Buy Now Pay Later Bureau is a specialty bureau being launched by Experian to provide real-time reporting of BNPL data, aimed at enhancing transparency and financial inclusion.

When will Experian launch The Buy Now Pay Later Bureau?

Experian plans to launch The Buy Now Pay Later Bureau in spring 2022.

How many Americans used BNPL products in 2021?

In 2021, 45 million Americans utilized buy now, pay later products.

What impact does BNPL spending have on consumer credit scores?

Experian's Buy Now Pay Later Bureau aims to report BNPL activity without negatively affecting consumer credit scores, providing a comprehensive view of financial obligations.

What opportunities does The Buy Now Pay Later Bureau create for lenders?

The bureau allows lenders to make informed credit decisions, potentially granting access to credit for thin-file or subprime consumers.

What percentage increase in BNPL spending has been observed since 2020?

Spending on buy now, pay later products has increased by 230% since the start of 2020.