Buy now, pay later” can be a convenient payment method. But if you don’t factor the recurring payments into your budget, it can get messy.
This is especially true if you’re juggling multiple buy now, pay later plans on top of other debts. The credit inquiries that some lenders conduct when you apply for any type of credit don’t always offer visibility into buy now, pay later plans you may hold with different companies, so it may be possible to bite off more than you can chew.
Equifax, one of the three major credit bureaus, is aiming to change that in the first quarter of 2022 by formalizing a process for including buy now, pay later information on credit reports.
“Part of the push here is to support responsible lending,” says Mark Luber, chief product officer for U.S. information solutions at Equifax. “When a company lends, they want to make sure the consumer can handle that new credit account and can in fact pay it back.”
An unpaid buy now, pay later balance could get sent to collections and potentially hurt your credit history. Late fees may also apply, depending on the company. And you could be barred from using the service temporarily or permanently.
Take action early to avoid these consequences and explore some options that can free up money to keep your finances on track.
1. SCAN YOUR FINANCES FOR OPPORTUNITIES
Revisit your budget (or create one) to understand where money is going. Consider adjustments on nonessential expenses.
“Do you need all of those…