Pave Survey: Financial Concerns over BNPL
60% of BNPL customers are worried about the impact of BNPL on their credit reports and credit scores. This comes as one of UK's main CRAs - TransUnion - confirms BNPL will appear on credit files from Summer 2022.
London, UK, 22nd February 2022 - A new survey from UK fintech Pave shows the vast majority of Buy Now Pay Later (BNPL) customers are unclear about the impact of BNPL on their credit scores, leading to the majority of customers to say they were worried about its impact. Here at Pave, we discovered the following:
- 78% of respondents (18-44) who have used Buy-Now-Pay-Later services don’t fully understand the impact of BNPL on their credit file.
- 60% of users are worried about the impact of BNPL on their credit files and credit scores.
- Nearly 23% of respondents became "reliant" on BNPL in the past 12 months.
UK Credit builder fintech Pave surveyed over 1000 people in January 2022 to understand the financial concerns of the public as the UK recovers from COVID-19. The use of BNPL has skyrocketed during this time, 48% of BNPL users in the 18-44 age group reported an increase in their usage. However, over 78% of respondents were unclear on the impact of using BNPL. This lack of clarity translates into concern for the customer, especially as Credit Reference Agency TransUnion has announced it will start recording BNPL on consumers’ credit files. Over two-thirds of respondents are worried about the impact BNPL is having on their credit score.
Sho Sugihara co-founder and CEO of Pave said “credit scores directly affect people's ability to access finance and customers are becoming more aware and knowledgeable about this. As BNPL services become more common, it's important for the customer to have complete clarity on its impact on their credit score. A large proportion of customers we surveyed were unaware that BNPL would impact their credit file at all. This is why we need increased transparency from BNPL firms''.
The rise of BNPL firms has been well documented, and for some individuals, BNPL is a trusted form of credit. In their survey Pave saw how people from all age groups were more likely to spend on BNPL than a credit card. It may seem that BNPL is becoming a trusted payment method, however, this survey shows customers are becoming increasingly concerned about its side effects.
Our mission is to improve the credit health of millions by building the world’s best credit builder. We do this by offering active bill payments monitoring and providing customers personalised, targeted credit health actions. The app has over 300,000 customers and is backed by early investors in N26 and the founders of Monzo and Indeed. Pave has been voted the Best Credit Building Product in 2021 by customers in the Consumer Credit Awards and was voted the Best New Personal Finance App 2021 by Moneynet.
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