Affirm, a provider of buy now, pay later financing, initiates reporting of all its pay-over-time loans to TransUnion starting May 1. The company has decided to include every loan, covering both its Pay in 4 service and extended monthly installment plans. This new initiative not only clarifies consumer payment histories but also offers a broader perspective on financing behaviors.
Affirm Expands Credit Reporting Scope
Industry Embraces New Reporting Practices
Additional sources indicate that earlier communications mentioned reporting similar data to Experian. Other industry reports reveal that the BNPL sector is increasingly sharing detailed consumer data. Such moves are part of a wider trend where alternative data is gaining recognition in credit assessments.
The company will now report comprehensive pay-over-time loan data, incorporating both its Pay in 4 and longer-term installment plans. Starting May 1, the transaction details for each new loan will show on TransUnion credit files. This step aims to provide a fuller view of consumers’ payment histories without immediately affecting traditional credit scores.
Consumers will see detailed transaction records on their TransUnion profiles, although lenders will not use this data in standard credit scoring models. The current approach maintains separation between reporting details and score calculations, while future scoring models may consider these new data points for a more inclusive evaluation.
Company officials stress the importance of this initiative in broadening consumer transparency.
“Including all loans in a consumer’s credit profile is a crucial step toward making Affirm’s honest financial products even more mainstream,” said Libor Michalek, Affirm President.
The detailed recording could encourage greater engagement with buy now, pay later services.
TransUnion representatives view this development as a meaningful industry milestone.
“Affirm’s loan furnishing to TransUnion is an exciting milestone for the industry. Millions of consumers use Affirm’s pay-over-time financing, and they deserve to get credit for their payment behavior,” stated Steve Chaouki, TransUnion’s president of U.S. Markets and Consumer Interactive.
Affirm will also work with stakeholders to establish uniform reporting standards across various loan products.
Affirm CEO Max Levchin highlighted the appeal of the service’s structured financing, emphasizing the control it offers consumers.
“Our appeal is not that it’s some cool way of borrowing money. It’s the sense of control around the schedule and the plan that you create,” Levchin said.
Rodney Hood of the Office of the Comptroller of the Currency noted that alternative data can improve credit scoring when FinTech tools are used effectively by banks.
The comprehensive reporting approach may influence how consumer behavior is tracked and evaluated in future credit models. Detailed loan records can ultimately offer benefits for both borrowers and lenders by promoting responsible payment actions. As the industry works toward standardized data practices, consumers may soon receive a more accurate financial picture with these enhanced records.
