Two million Brits’ credit scores already hit by Klarna-style ‘buy now, pay later’ schemes

Industry News | 09/01/20

Millions of people could find themselves rejected for mortgages, loans and even mobile phone contracts because they used a ‘buy now, pay later’ scheme such as Laybuy or Klarna. The past year has seen a boom in these payment initiatives, which let shoppers buy mid-priced items – often fashionable goods at chains such as Topshop and JD Sports – without paying a penny up front. They operate by allowing you to pay later – typically two to four weeks after buying the goods – or spread the cost over a few weeks rather than paying all at once. However, while there are no interest fees, failing to make payments could push you into a credit trap. This is because while you might not be hit by a penalty charge or interest, a non-payment will affect your credit score – which is what lenders look for when you apply for credit.

Source: The Mirror