Could BNPL reporting help more first-time homebuyers qualify?

Millions of U.S. consumers are using Buy Now/Pay Later (BNPL) options for online and in-store purchases of technology, clothing and accessories, pet necessities, sports and concert tickets, and flights and hotels. These installment financing programs typically don’t charge interest and don’t perform a “hard credit check” that will show up on a consumer’s credit file. Most BNPL operators don’t report to the credit bureaus, potentially holding back positivecredit feedback for some customers while hiding excessive use or poor payment history for others. Tracking BNPL payment history could help some and hurt otherconsumer credit files. Homebuilders serving the entry buyer segment often cite the lack of credit history as a challenge to qualifying buyers. If BNPL operators start reporting customers’ responsible usage and prompt payments, more potential first-time homebuyers may qualify for mortgages. However, the potential impact of BNPL installment loans on buyers’ debt-to-income ratios is stillunclear. Even consumers with good BNPL payment histories might facehigher-cost FHA mortgages due to higher, though temporary, debt payments. How Buy Now, Pay Later installment financing works Tod...