Buy Now Pay Later (BNPL) is a digital payment method  that allows you to make purchases and spread out the payments over time.  It includes service providers in Australia such as AfterPay and  Zip Pay y. From 10 June 2025 these providers will be subject to the National Consumer Credit Protection Act. They will operate under similar credit laws that apply to other credit services like loans and credit cards. This means when you apply for BNPL, your provider will need to conduct a credit check, which will be recorded on your credit file.

Consistent, on-time BNPL repayments may help your credit score, but missing repayments may have a negative impact as it does with defaulting on other forms of credit. 

Lenders will also likely consider your BNPL activity when you apply for mortgages or other loans, reviewing your payment history and outstanding balances to assess your overall creditworthiness. 

Ultimately, the way you manage your BNPL repayments will play a role in shaping your credit profile. To make the most of the convenience of BNPL while maintaining your financial health, keep these five practical strategies in mind:

1. Do your research – Each BNPL product is different, so it’s important to make sure that all financial obligations under each agreement are understood, as well as the fee structure.

2. Use with restraint – While BNPL services can provide substantial value, they should be utilised with caution. For consumers who find it challenging to manage their money, it can be wise to limit the use of these services. While many of them are often interest-free, these services can charge late fees that can rack up quickly if the repayment criteria is not met.

3. Mind your budget – Integrate BNPL payments directly into your budget. Allocate funds for these repayments, just like any other recurring cost.

4. Link them to your debit card – BNPL services can typically be linked to a debit card or credit card. However, if BNPL debt is being paid off on a credit card, and the balance is not paid in full each month, credit card interest could be paid on those purchases. Therefore, a method to keep to a budget would be to use a debit card instead.

5. Keep an eye on your credit report – Building a good credit score means using credit carefully and showcasing that debt can be paid on time.
    

Learn how BNPL will impact your credit report.
 

Click here to access your Equifax credit report.

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.