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Buy now, pay later lets you spread the cost of buying goods – but how does Klarna affect your credit score? And how do Clearpay and other BNPL providers compare? It’s worth understanding how these schemes work because using Buy Now, Pay Later can have an impact on whether you can get a mortgage.
With Buy now, pay later, instead of paying a retailer for goods in full at the till or online checkout, the Buy now, pay later credit provider pays the retailer for you. And then you’ll pay the Buy now, pay later, provider – interest free – over a number of regular instalments. Or pay it off as a lump sum at a later date. It’s also known as “point of sale credit”.
Each scheme is different; some give you 30 days to pay while others allow you up to 12 months. There are potential benefits; it could mean you can avoid going into your overdraft and unlike most credit cards or store cards, Buy now, pay later schemes don’t charge interest.
Buy now, pay later has become very popular: More than 8.5 million people used Buy Now Pay Later in the UK in 2025, making more than 100 million transactions worth over £7 billion, according to Experian.
However, there are pitfalls to beware of, in particular relating to your credit score. Read on for more on these.
The main The main providers of Buy now, pay later credit are:
A number of other BNPL providers are available.
One factor that determines whether using Buy now, pay later affects your credit score is whether or not the BNPL provider shares your spending data with credit reference agencies.
Missing Buy Now, Pay Later payments could affect your credit record and make it harder or more expensive to borrow in future.
Klarna and PayPal share repayment information with credit reference agencies, while Clearpay says missed payments may be reported. So if you miss a payment, this could appear on your credit file and may be visible to other lenders.
If you continue to miss payments, your BNPL provider may also pass the debt to a debt collection agency. If a default is recorded on your credit file, it can remain there for six years and could affect your chances of being approved for credit.
You may also face other consequences for missing payments, such as late fees, depending on the provider.
When you apply for a mortgage, the lender will usually check your credit history with one or more of the UK’s main credit reference agencies – Experian, Equifax and TransUnion. Your credit history is one of a number of factors a lender may consider when deciding whether to offer you a mortgage.
If you miss Buy Now, Pay Later payments and this is recorded on your credit report, it could count against your mortgage application. However, even if your BNPL borrowing doesn’t appear on your credit report, it doesn’t necessarily mean a mortgage lender considering your application won’t know you have been using these schemes.
Lenders may look for Buy Now, Pay Later commitments when analysing the bank statements you submit when applying for a mortgage. So your borrowing may be picked up even if it isn’t on your credit report. Mortgage lenders will assess your income and outgoings when deciding how much you can afford to borrow. So outstanding or regular BNPL commitments may be taken into account as part of this assessment. Read our guide How to make a successful mortgage application
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage. Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
Klarna carries out a soft credit check when you use products such as Pay in 3 or Pay in 30, while Clearpay says it carries out a soft credit check on new customers. PayPal says it may carry out a soft check for Pay in 3 if it needs more information. Soft credit checks don’t affect your credit score.
Buy Now, Pay Later can make it easier to spread the cost of purchases, but it can also make it harder to keep track of how much you’re spending and borrowing.
Research has found that some people spend more when using Buy Now, Pay Later and that using these schemes can contribute to higher levels of personal debt.
Here are some ways to protect your credit score:
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage. Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
New rules for Buy Now Pay Later came into force on 15 July 2026. Deferred Payment Credit – a common form of interest-free Buy Now Pay Later – is now regulated by the Financial Conduct Authority when the lender and retailer are different businesses.
This means lenders must carry out proportionate checks to make sure you can afford the repayments before lending to you. You’ll also get clearer information about the agreement and additional support if you’re struggling to make repayments.
For qualifying agreements taken out from 15 July 2026, you’ll also be able to complain to the Financial Ombudsman Service and may benefit from Section 75 protection on eligible purchases.
Potentially. Clearpay says missed payments may be reported to credit reference agencies, which could affect your credit record. A mortgage lender may also take outstanding Buy Now, Pay Later commitments into account when assessing your application and affordability.
Using Klarna doesn’t necessarily mean your credit score will be negatively affected. However, Klarna shares information about borrowing and repayments with credit reference agencies, so late or missed payments could affect your credit record and may be taken into account when you apply for credit in future.
Using Clearpay doesn’t necessarily mean your credit score will be negatively affected. However, Clearpay says missed payments may be reported to credit reference agencies, which could affect your credit record and your ability to borrow in future.
Yes. Clearpay says it carries out a soft credit check on new customers and may carry out further soft checks as part of its affordability assessments. Soft credit searches don’t affect your credit score and aren’t visible to other lenders.
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