Buy now, pay later could be the catalyst for the next credit crisis, private lender says
Glen Weinberg (pictured top), COO and partner at Fairview Commercial Lending in Colorado, said the credit scores and debt-to-income (DTI) numbers brokers are seeing may be complete fiction.
“People are goosing their credit scores because instead of using a credit card, they do a BNPL loan like Affirm or Klarna, and it doesn’t show up on your credit,” Weinberg told Mortgage Professional America. “So you can go buy a house, a car, whatever. No impact. And yet you have $2,000, $5,000, $10,000 — who the hell knows — of these buy now, pay later lines out there that nobody knows about. Because it’s not showing on credit reports.”
Penalizing the wrong borrowers
The credit reporting situation is more complicated than a simple gap, Weinberg said. Some BNPL providers do appear on credit reports, but even when they do, the balances are not meaningfully factored into the credit score. The Fed report found that 63% of total BNPL issuance in 2025 carried zero percent APR, meaning borrowers who may be underwater may not appear that way in calculations.
“Even if it is on there, it’s not impacting the score,” he said. “We don’t know how to factor in that payment because we don’t know what the high balance is. It’s not like a typical credit thing. So the credit scores are considerably overstated.”
The effect, Weinberg said, inverts what a credit score is supposed to measure. Historically, BNPL users skew toward higher credit risk because credit card limits are unavailable or tapped out, yet their scores do not reflect that.
