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FICO’s latest scoring models now factor in buy now, pay later repayment data, a milestone many hoped would bring these plans into the mainstream credit system, giving lenders more visibility into consumers’ total debt and payment behavior.
However, despite billions flowing through installment-payment platforms, lenders still can’t see the full credit picture. Analysts warn it could take years before BNPL data meaningfully influences lending decisions. The issue isn’t a lack of innovation in credit scoring, but the fragmented architecture behind BNPL itself. Since not all payment providers report to major credit bureaus, most lenders still can’t see or use their data effectively, and integration takes time to calibrate.
Embedding financing from banks and regulated lenders can finally connect the dots, turning BNPL from a data dead-end into part of the credit ecosystem.
Even with new scoring models available, adoption has been slow. Most lenders still operate on older FICO versions that don’t incorporate BNPL data. Without consistent reporting from providers, the information those models rely on remains incomplete.
“Most lenders tend to rely on older versions of FICO models due to the cost of the resources required to implement newer versions… As a result, it will “be years (if ever) before BNPL activity will be fully and consistently reflected in the scores that determine credit eligibility,” says Kevin King, vice president of credit risk for LexisNexis Risk Solutions.
Short-term, interest-free BNPL plans aren’t treated as traditional loans, leaving them outside normal credit-reporting requirements. Hence, scoring models can’t “see” much of a consumer’s actual repayment history, rendering entire categories of credit behavior invisible to them. Without shared infrastructure, even the best models are operating blind. The issue isn’t analytics sophistication but data plumbing. You can’t run advanced scoring on missing or messy data.
Most BNPL products were built by fintechs, meaning they sit on proprietary systems that were designed for checkout speed, not data standardization. Each provider defines risk, repayment behavior, and delinquency differently, making standardized reporting technically complex and commercially unattractive, which is why even voluntary reporting to credit bureaus remains inconsistent.
The Consumer Financial Protection Bureau (CFPB) recently warned that BNPL loans rarely appear in credit files, making it difficult for regulators to measure basic indicators, like how often consumers use these products, how much debt they accumulate, or how many loans they juggle across providers.
Fragmentation doesn’t just obscure risk, it manufactures it. Lenders are left without a full picture of exposure, and consumers who repay responsibly gain no credit benefit while others take on debt invisible to the system. Until BNPL data is mandated to flow through a regulated infrastructure, the system will remain fragmented — and credit visibility will remain out of reach.
When merchants embed loans and credit options from banks, the loan originates within a regulated infrastructure, where credit reporting, identity verification, and data consistency are built in.
Every repayment event — approval, servicing, or delinquency — flows automatically to major credit bureaus under established Fair Credit Reporting Act and Truth in Lending Act frameworks. Visibility is immediate rather than retrofitted through third-party integrations, meaning bureau-ready data flows are built in by design, not added later.
This allows consumers to access transparent credit that helps build their credit score rather than operate outside of it. Banks access more robust borrower data and behavior insights, which also benefit merchants.
While embedded lending doesn’t automatically fix every reporting gap, it plugs point-of-sale loans from banks into the same regulated data rails that feed credit bureaus, closing the feedback loop for credit scoring. FICO and other models finally receive consistent repayment data, and responsible behavior strengthens customers’ profiles instead of disappearing into disconnected fintech systems.
What holds back BNPL isn’t model sophistication but the lack of interoperable systems that connect repayment data to the wider credit ecosystem. By embedding financing built on banks’ regulated infrastructure, lenders, merchants, and consumers can finally participate in a unified reporting system that strengthens both credit visibility and financial responsibility. The real winners in installment loans will be those who pair a seamless checkout with equally seamless data reporting.
—Yaacov Martin is CEO of Jifiti.
