Buy Now Pay Later services in Australia are no longer invisible to credit reporting agencies. Since June 10, 2025, your BNPL usage now directly impacts your credit file and credit score, marking a fundamental shift in how these services operate.
Key Takeaways:
- BNPL providers must now conduct credit checks before approving applications
- Your BNPL repayment history gets reported to credit bureaus and affects your credit score
- Missed BNPL payments can damage your credit rating just like credit card defaults
- Lenders now assess your BNPL usage when evaluating mortgage and loan applications
- Even unused BNPL credit limits count as potential debt when applying for loans
- Responsible BNPL usage can now help build your credit history
What Changed with BNPL Regulations in June 2025
The Australian Government brought BNPL services under the National Consumer Credit Protection Act, treating them as “low-cost credit contracts”. This regulatory shift means BNPL providers now operate under the same rules as banks and credit card companies.
New Requirements for BNPL Providers
All BNPL companies must now:
- Hold an Australian Credit License from ASIC
- Join the Australian Financial Complaints Authority (AFCA)
- Conduct affordability assessments before approving customers
- Report customer payment behaviour to credit reporting agencies
- Provide clear pre-contract disclosures about terms and conditions
What This Means for Consumers
Your relationship with BNPL services has fundamentally changed. Previously, you could sign up for multiple BNPL accounts without any credit checks or reporting to credit bureaus. Now, every BNPL application and payment gets tracked on your credit file.
Research from the University of Sydney found that approximately 10% of BNPL users could be considered ‘high risk’. These users may now face declined applications or reduced credit limits under the new affordability requirements.
How BNPL Now Affects Your Credit File
Credit Inquiries
When you apply for a new BNPL service, the provider performs a credit check. This inquiry appears on your credit file and can temporarily lower your credit score by a few points. Multiple BNPL applications within a short period can compound this impact.
Payment History Reporting
Your BNPL repayment behaviour now gets reported to major credit bureaus, including Equifax, Experian, and Illion. This includes:
- On-time payments (positive reporting)
- Late payments (negative reporting)
- Missed payments (negative reporting)
- Account closures
Credit Utilisation Impact
Open BNPL accounts contribute to your total available credit, affecting your credit utilisation ratio. Even if you’re not actively using all your BNPL services, lenders view these as potential debt when calculating your borrowing capacity.
Impact on Mortgage and Loan Applications
Lenders now scrutinise your BNPL usage when assessing loan applications. Your BNPL history affects both your credit score and your borrowing capacity calculations.
How Lenders Evaluate BNPL Usage
Repayment History Analysis
Lenders examine whether you make BNPL payments on time. A pattern of late payments suggests poor financial management and increases lending risk.
Debt-to-Income Calculations
Outstanding BNPL balances get included in your total debt obligations. High BNPL usage can reduce the amount lenders are willing to approve for your mortgage or personal loan.
Financial Behaviour Assessment
Lenders analyse your BNPL usage patterns to assess your budgeting skills and financial discipline. Multiple active BNPL accounts or frequent usage for everyday expenses can raise red flags.
Real Impact on Borrowing Capacity
Even small BNPL commitments can significantly affect your borrowing power. For example, if you have $1,000 across various BNPL accounts, this could reduce your mortgage borrowing capacity by $50,000 to $100,000, depending on your income and other commitments.
Step-by-Step Guide for Managing BNPL Under New Rules
Before Applying for New BNPL Services
Step 1: Check Your Current Credit Score
Review your credit report to understand your starting position. You can get a free copy from credit reporting agencies.
Step 2: Calculate Your Existing Commitments
List all current BNPL accounts, outstanding balances, and monthly payment obligations.
Step 3: Assess Your Genuine Need
Ask yourself if you truly need another BNPL service or if it’s an impulse decision.
Step 4: Research Provider Policies
Different BNPL providers have varying credit check requirements and reporting practices. Choose providers that align with your financial goals.
Managing Existing BNPL Accounts
Step 1: Consolidate Where Possible
Consider closing unused BNPL accounts to reduce your total available credit and simplify your financial management.
Step 2: Set Up Payment Reminders
Use calendar alerts or automatic payments to avoid late fees and negative credit reporting.
Step 3: Track All Payments
Monitor your credit report regularly to verify that your payments are being reported accurately.
Step 4: Plan Major Purchases
If you’re planning to apply for a mortgage or car loan, avoid new BNPL applications for at least three to six months beforehand.
Red Flags That Damage Your Credit File
Multiple Late Payments
Missing BNPL payments by more than 15 days typically triggers negative reporting to credit bureaus. Three consecutive late payments can cause significant credit score damage.
Exceeding Credit Limits
Going over your approved BNPL limits, even temporarily, can result in negative reporting and additional fees.
Opening Too Many Accounts
Multiple BNPL applications within a short period can signal financial stress to lenders and result in declined applications.
Using BNPL for Essential Expenses
Regularly using BNPL for groceries, utilities, or rent payments suggests cash flow problems and poor financial management.
Planning for Major Purchases?
If you’re considering a mortgage, car loan, or other significant credit application in the near future, take these steps:
6 Months Before Applying
- Stop all new BNPL applications
- Pay down existing BNPL balances
- Close unnecessary BNPL accounts
3 Months Before Applying
- Maintain perfect payment history across all accounts
- Avoid any changes to your credit profile
- Gather documentation showing responsible BNPL management
1 Month Before Applying
- Check your credit report for accuracy
- Prepare explanations for any BNPL usage
- Consider temporarily reducing BNPL usage to show improved cash flow
The landscape of BNPL in Australia has changed permanently. What was once an invisible financial tool now plays a direct role in your credit profile and borrowing capacity. The key to success lies in treating BNPL with the same respect and attention you give to credit cards and personal loans.
Your financial future depends on adapting to these changes thoughtfully. By managing your BNPL accounts responsibly, monitoring your credit report regularly, and planning ahead for major purchases, you can turn these regulatory changes into opportunities for building stronger credit.
If you’re concerned about how BNPL usage has affected your credit file or need guidance on credit repair strategies, Easy Credit Repair specialises in helping Australians navigate complex credit situations. Our team understands the nuances of the new BNPL regulations and can provide personalised advice for your specific circumstances.
Ready to take control of your credit future?
Check out our services or get a free quote to see how we can help you optimise your credit profile in this new regulatory environment.
Frequently Asked Questions
How can I check if my BNPL usage has already affected my credit score?
Get a free credit report from Equifax, Experian, or Illion. Look for BNPL inquiries from June 2025 onwards and any reported payment history. Check your credit score through these bureaus or your bank’s app. Dispute any inaccuracies immediately.
Can I still get approved for a home loan if I have multiple BNPL accounts?
Yes, but lenders will assess your BNPL payment history, balances, and credit limits. To improve approval chances: maintain perfect payments, pay down balances, and close unused accounts 3-6 months before applying. Shop around as some lenders are more BNPL-friendly.
What should I do if I’ve already missed BNPL payments and damaged my credit?
Bring all accounts current immediately. Contact providers for payment arrangements if needed. Focus on building a positive payment history going forward. Consider credit repair assistance – recovery typically takes 12-24 months of consistent payments.
How long do BNPL inquiries and missed payments stay on my credit file?
Credit inquiries: 2 years (minimal impact after 12 months). Missed payments and defaults: up to 5 years. Impact reduces over time with consistent positive payment behaviour. Recent positive history outweighs older negative marks.
Should I close all my BNPL accounts if I’m planning to apply for a major loan?
Keep 1-2 accounts you use responsibly and close the rest. Pay all balances to zero and maintain a perfect payment history. The goal is to reduce total available credit while showing responsible usage patterns.
Disclaimer:
All information provided is based on current research and our professional views. Credit regulations and lending criteria can change. If you have specific questions about your situation, please reach out to us for personalised advice.