Why Your Credit Score Matters (Especially If You Use Buy Now Pay Later)

If you’re thinking about buying a home, your credit score might be more important than you realise, especially if you’re using Buy Now Pay Later (BNPL) services like Afterpay or Zip Pay.

Many first home buyers aren’t aware that these services may show up on their credit file. While they can feel like harmless short-term tools, regular BNPL usage may affect your ability to get a home loan.

So, what is a credit score?

Your credit score is a number that reflects how well you’ve managed money in the past. It’s based on your repayment history, credit limits, loans, and even things like missed bills or late payments.

When you apply for a loan, lenders check your score to help them decide:

• Whether they’ll lend to you

• How much you can borrow

• What kind of interest rate you might get

How Buy Now Pay Later affects it

Even though BNPL platforms don’t feel like credit cards, they can still show up on your file. If you’re using them often, especially for non-essentials, lenders might see it as a sign that you struggle to budget or save.

It’s not just about the money you're spending. It’s how your financial behaviour looks on paper. If you have multiple BNPL accounts or use these frequently, this may reflect a financial instability to manage debt. 

In some cases, we’ve seen lenders reduce how much someone can borrow just because they had active BNPL accounts or multiple small debts on their file.

What can you do about it?

Before applying for a home loan, we usually recommend:

• Paying off and closing any BNPL accounts

• Avoiding new applications for credit or loans

• Staying on top of bills and repayments

• Checking your credit report for any surprises

These steps show lenders that you’re in control of your money, and that goes a long way when applying for finance.

Final Thoughts

Your credit score is just one piece of the puzzle, but it can have a big impact on your borrowing power.

If you’re not sure where to start or what your credit file looks like, we can help you check it and guide you on how to improve it - before you apply for a loan.

It’s all part of helping you get loan-ready with confidence.