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Klarna’s restructuring means that missed payments will show up in your credit file from today

Klarna reports late payments and unpaid purchases for Pay in 30 and Pay in three orders placed on or after June 1st to both Experian and TransUnion

Klarna is one of the leading companies in the field of
Klarna is one of the leading companies in the field of “buy now, pay later”.

Klarna customers will see their transactions logged in their credit file starting today, as part of a major restructuring by the Buy Now, Pay Later company.

Late payments and unpaid purchases for Pay in 30 and Pay in three orders placed on or after June 1 will be reported to both Experian and TransUnion.

The change means you may be less likely to be accepted for a loan or mortgage in the future if you regularly miss payments.

However, there is good news for those who use Klarna responsibly.

Payments made on time are also reflected in your credit file, which could actually improve your credit score.

Alex Marsh, Head of Klarna UK, said: “The vast majority of the 16 million UK consumers who make Klarna BNPL payments in full and on time will be able to demonstrate to other lenders their responsible lending practices.”







Klarna is one of the leading companies in the field of “buy now, pay later”.
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Picture:

SOPA Images/LightRocket via Getty Images)

Even though Klarna starts reporting your repayment history from today, the new measures shouldn’t impact your actual credit score by the end of the year.

This is because both Experian and TransUnion are still working on including Klarna payments in their overall scoring mechanism.

Did you have problems with Klarna? Let us know: mirror.money.saving@mirror.co.uk

Any payment history you have with Klarna before today will not be reported. Klarna also does not currently share any customer data with Equifax.

An Experian spokesman said: “As with any form of lending, if managed responsibly, BNPL arrangements can provide a helpful way to spread the cost of products and services – if you don’t borrow more than you can afford, repay, and you shall make any agreed payments on time and in full.

“As with other loans, missed payments can result in additional charges and, over time, affect your creditworthiness in the eyes of other lenders.”

Competing “buy now, pay later” provider Laybuy shares its customers’ purchase history with Experian, but not with Equifax or TransUnion.

Clearpay does not currently share customer information with credit reference agencies.

As the name Buy Now, Pay Later suggests, you can buy items and pay later — typically within 30 days with no interest or hidden fees.

If you’re using a “buy now, pay later” service, you’re unlikely to be subjected to a “hard” credit check at any point – critics say it means people are taking the risk of borrowing money they intended to can not afford.

In February, the Financial Conduct Authority said some companies had agreed to amend the terms of their customer contracts to make them fairer and easier to understand.

The UK government plans to amend the law to bring some forms of unregulated purchase of instant payment products under FCA regulation.

Jenny Ross, which ones? Money Editor said: “Buy now, pay later is an easy and convenient way to pay millions.

“However, with little or no information or warning currently emerging about the risks of late fees or debt, there is concern that many buyers do not fully understand the products they are using.

“The move by BNPL providers to work with credit bureaus to report customers’ BNPL usage and missed payments is a step in the right direction as it could help mitigate the risk of consumers using more BNPL credit absorb than they can afford.

“However, this does not relieve the urgent need for all BNPL firms to be government regulated as soon as possible to ensure users are adequately protected.”

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https://www.mirror.co.uk/money/klarna-shake-up-means-missed-27123419 Klarna's restructuring means that missed payments will show up in your credit file from today

Fry Electronics Team

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