How BNPL is cropping up in consumers’ credit reports


Pratik Bhakta

192 reads

Pratik Bhakta

192 reads

The Crux newsletter this week. ‘Buy now, pay later’ options are essentially small-value loans, a fact few people realise while shopping or using services online. Worse, some companies are activating the facility without properly telling customers how it might impact their credit scores

March 11, 2022


Last week, we wrote about how ‘buy now, pay later’ offerings are coming back to bite lenders, which are seeing an increase in missed repayments. Consumers are also discovering problems that have begun to affect their carefully built financial history.

People are being signed up for the BNPL option — basically, a loan — despite not actively seeking it. Rahul Panda, who works at one of the country’s largest public-sector enterprises, recently found that his credit score had fallen by several points. Further inquiries revealed that a BNPL credit line had been thrust upon him.

A costly click: Panda traced the issue to his move to invest in crypto last June. The crypto exchange he chose accepted payments only through MobiKwik wallets. He installed the app and completed a basic customer check (KYC) and, without realising it, received a Rs 2,000 credit line from MobiKwik Zip.

“I had no idea that MobiKwik had opened a credit line against my name. When I checked my credit report recently, I found that there is a Rs 2,000 loan from IDFC First Bank against my name,” he told The CapTable from Chhattisgarh.

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