Credit report

Your Klarna payment habits will start to impact your credit report

Klarna will start telling credit agencies if customers pay on time or miss announced payments.

The buy-it-now, pay-later business, which offers customers the option to pay for their purchases in installments or at a later date, said that from 1st June, Klarna’s repayment habits will appear on a person’s credit report.

The move comes under pressure from debt advocates and campaigners who argue consumers should be discouraged from taking on more debt than they can afford.

As part of the decision, some say that regular borrowers who use Klarna and don’t repay the money they owe on time will have a negative impact on their credit rating and that will put some people off, but Klarna says that this it’s not the case.

Klarna UK manager Alex Marsh said The Guardian“It is alarming that UK consumers are still being forced to take out high-cost credit cards to demonstrate that they can use credit responsibly and build their credit profile. This will start to change on June 1 this year. , as the vast majority of the 16 million UK consumers who make Klarna BNPL payments in full and on time will be able to demonstrate their responsible use of credit to other lenders.

The Buy It Now and Pay Later company also added, “Consumers who make their payments on time can build a positive credit history, showing lenders that they are using credit responsibly.”