The UK’s ‘Buy now pay later' (BNPL) firm, Klarna, has announced they’ll share data with UK credit referencing agencies from June 2022.
From the 1st of June, Klarna started sharing payment histories with two major UK credit referencing companies, Experian and TransUnion. They can now see whether you have made payments on time, paid late, or have unpaid items.
Why is this happening?
BNPL providers are not currently regulated and do not have a record of your payment history.
The FCA has shown concern over this, as lenders cannot see how responsible you are with your money. For instance, you could have thousands of pounds of debt on BNPL schemes which would not be visible to lenders.
Sharing this information with companies like Experian and TransUnion will hopefully stop people who may already be in debt from getting into further financial difficulty by taking out loans and mortgages they’ll struggle to repay.
How will this impact my credit score and my chances of getting a mortgage?
Making payments on time helps build your credit score as it shows you’re reliable and trustworthy with your money. So, if you use Klarna responsibly, this change could positively impact your mortgage application.
On the flip side, if you miss your payments, it could negatively impact your ability to obtain credit. In other words, you’re not the type of person a lender would want to lend money to, so you may find it harder to get a mortgage.
How can we help?
If you’re worried that your credit history may impact your mortgage application, then it’s time to speak to our expert mortgage advisers.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.