Learn about BNPL’s impact on your CIBIL Score and how it works. Understand how it affects your credit score and how you can use it to help build your score.
Last updated on: January 14, 2026
Quick Answers
Yes, using Buy Now, Pay Later (BNPL) services can impact your credit score. If you make timely payments and the provider reports your activity to a credit bureau, it can help build your credit. However, missed payments or defaults can negatively affect your score. Always manage BNPL responsibly to avoid potential harm.
Buy Now, Pay Later (BNPL) has emerged as a widely used payment option, enabling you to make purchases immediately and repay the amount via instalments. Instead of settling the full bill at once, you can spread payments over weeks or months, often with little or no interest.
Essentially, BNPL functions as a short-term instalment loan initiated at the point of purchase and repaid through scheduled instalments until completion. For instance, when purchasing a laptop worth ₹70,000 through BNPL, you may opt to pay ₹11,666 in six equal instalments instead of the entire amount upfront. This flexibility makes BNPL particularly attractive for big-ticket purchases, helping you manage expenses without straining your monthly budget.
When it comes to your credit score, BNPL can have both positive and negative effects. Timely repayments reflect responsible borrowing and can improve your credit profile. However, late or missed payments are reported to credit bureaus and may harm your credit score, just like any other loan.
Buy Now Pay Later (BNPL) allows you to make a purchase and pay for it in instalments over a set period. At checkout, simply choose the BNPL option, enter your details, and the issuer may conduct a soft credit check.
Once approved, the issuer settles the payment with the merchant on your behalf, and you repay the issuer in manageable instalments. These instalments may follow short-term "pay-in-four" plans (fortnightly or four-weekly) or extend into longer EMI structures.
While some BNPL plans offer interest-free payments, others may carry a modest interest rate or fees for late payments. This flexibility provides a convenient alternative to credit cards, helping you manage larger purchases without an immediate full payment.
Buy Now Pay Later's impact on your credit score largely depends on how responsibly you manage repayments. Making payments on time can strengthen your credit profile, while defaults or delays can negatively affect it:
When you make your BNPL payments on time, the lender reports them to credit bureaus. This helps you establish a positive credit history, which is particularly useful if you have limited or no prior credit experience.
If you miss or delay your BNPL payments, the lender reports this to credit bureaus. Even a single late payment can quickly damage your credit score due to the short-term nature of BNPL loans.
BNPL loans often come from a merchant’s partner bank or NBFC. You may not immediately recognise the lender listed on your credit report, which can lead to disputes or complaints if it appears unfamiliar.
Use BNPL responsibly to enjoy its benefits without harming your credit score. By managing your repayments effectively, you can avoid unnecessary debt and maintain your financial stability. Here are some practical tips:
Carefully review repayment schedules, interest charges, and fees in advance, as these may vary depending on the provider.
Use automatic payments or calendar alerts to ensure instalments are paid on time and to avoid late charges.
Check your credit report regularly to confirm that BNPL payments are being accurately reported to the credit bureaus.
Use BNPL only for purchases you can repay within the specified period, and refrain from taking on debt that may strain your finances.
BNPL can help you establish or improve your credit score. When used responsibly, it reflects a positive repayment history that may be reported to credit bureaus. Here is how you can strengthen your score with BNPL:
Make all payments on or before the due date to build a reliable credit history. Even a single delay can negatively affect your score, so consistency is key.
Using BNPL reduces your reliance on credit cards and helps maintain a lower credit utilisation ratio, which reflects positively on your credit behaviour.
Choosing a longer repayment tenure can ease cash flow management and simplify instalments. Regular, timely payments over several months contribute to a strong repayment record.
Maintain accurate records of all BNPL transactions to avoid missed payments and ensure proper reporting to credit bureaus. This also helps in managing multiple BNPL accounts effectively.
BNPL's impact on your CIBIL score can be either positive or negative, depending on how you manage repayments. Consistent and timely payments strengthen your credit history and improve your score, whereas delays or defaults can damage it.
Using BNPL responsibly and maintaining repayment discipline is therefore essential to safeguard and build long-term creditworthiness.
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No, BNPL is not always interest-free. While many providers offer short-term, no-cost instalment plans, longer tenures or missed payments may attract interest charges and additional fees.
Yes, BNPL can be used for a wide range of purchases such as electronics, fashion, travel, and healthcare. However, its availability depends on whether the merchant or platform supports BNPL as a payment option.
BNPL typically offers short-term, interest-free instalments for specific purchases, making it easier to budget for smaller expenses. Credit cards, however, provide broader spending flexibility, rewards, and opportunities to build credit. However, they often carry higher interest rates if balances are not cleared on time.
Yes, you may use multiple BNPL services simultaneously, provided you manage repayments responsibly. However, handling several accounts increases the risk of missed payments, which may negatively affect your credit score.
Yes, BNPL services can impact your credit score, as repayment data is often reported to credit bureaus. Timely payments may improve your score, while late or missed payments can lower it.