TransUnion has announced it is to accept buy now, pay later (BNPL) finance into UK consumer credit files.

The firm becomes the first credit reference agency in the UK to make the move.

TransUnion said the inclusion of BNPL in its credit information would help protect consumers and enable finance providers to ensure that payment plans are affordable and sustainable.

BNPL finance saw unprecedented growth during the pandemic, with TransUnion research indicating that more than a third of consumers (35%) used this type of payment in 2021.

The addition of BNPL data to UK credit files follows extensive industry debate and TransUnion revealed that its decision acknowledges a key recommendation of the Woolard Review. The credit reference agency said that protection has been “central” to the changes and new search footprints are being introduced to enable consumers and lenders to see applications for this kind of finance.

“We’re delighted to announce these important changes to the way buy now, pay later products are treated within the credit ecosystem,” commented CEO of TransUnion in the UK, Satrajit Saha.

“We’ve been working closely with prominent providers of buy now, pay later finance to lead the way in line with industry changes and consumer needs. Incorporating this data into credit reports will support consumers that are using this type of point-of-sale finance, whilst also ensuring lenders have a comprehensive picture of a borrower’s financial position.”

Under a phased implementation, TransUnion will utilise BNPL data within a range of its products which are widely used by leading banks and credit providers across the UK. This data will start to appear on consumer credit reports from summer 2022. 

TransUnion chief product officer, Shail Deep, added: “These changes will be really beneficial for those with thin credit files, supporting financial inclusion and wider access to credit, as well as helping to ensure finance providers have a holistic view of an individual’s borrowing, so they can use these insights to help ensure the right outcomes for consumers.”

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