Buy now, pay later (BNPL) services like Afterpay let you make a purchase upfront and spread the cost over several instalments. It's a popular way to manage spending, but you'll now be subject to a credit check when you apply, which may affect your credit score.
How can Afterpay affect my credit score?
When you apply for a new Afterpay account, Afterpay will conduct a credit check. This creates an enquiry on your credit report, which can be seen by other credit providers and may affect your credit score.
Afterpay may also conduct another credit check if you request a higher spend limit.
These checks were introduced on 10 June 2025, when Afterpay and other BNPL providers came under stricter credit regulations in Australia. They must now hold a credit licence and become members of the Australian Financial Complaints Authority (AFCA), bringing them more in line with other credit providers.
These changes apply to all BNPL providers, not just Afterpay, so the same credit check rules apply whether you're using Zip, Klarna or any other BNPL service.
Does how I use Afterpay make a difference?
Using Afterpay won't automatically have a negative impact on your credit score, but it also depends on how you use it:
| Action | Possible credit impact |
|---|---|
| Applying for Afterpay | A credit enquiry will appear on your credit report. One enquiry may affect your score, but several credit applications within a short period can have a greater impact on your credit profile. |
| Requesting a higher spend limit | Afterpay may conduct another credit check, creating an additional enquiry on your credit report. |
| Making repayments on time | Afterpay does not routinely report your day-to-day repayment history, so paying on time is unlikely to build your credit score in the same way as repayments on some other credit products. |
| Missing a repayment | A missed payment does not automatically appear on your credit report, but it may result in late fees, account restrictions or collection activity. |
| Falling significantly behind | Afterpay may report overdue payments, defaults or serious credit infringements to a credit reporting bureau, which may negatively affect your credit score. |
The safest approach is to treat Afterpay like any other credit product: use it sparingly, repay it on time and avoid relying on it for everyday spending.
What if I have more than one BNPL account?
Each new BNPL account you open, whether with Afterpay, Zip, Klarna or another provider, triggers its own separate credit check and its own enquiry on your file. Applying for several BNPL accounts within a short period can compound, showing up as multiple enquiries in quick succession, which will have a bigger impact on your credit profile than a single application on its own.
Can Afterpay affect my chances of getting a loan?
Yes, regular Afterpay use can affect your chances of getting approved for a loan, even if it doesn’t directly reduce your credit score.
When you apply for a car loan, personal loan or home loan, lenders may review your bank statements and treat regular BNPL repayments as an ongoing expense. This can reduce the income available to meet new repayments, lowering your borrowing power or affecting whether you meet a lender’s approval criteria.
Some lenders may also view frequent BNPL use as a sign that you rely on credit to cover everyday expenses, particularly if you have several active accounts or regularly carry outstanding balances, which may also reduce your chances of approval.
"Even if you have a perfect history of meeting your repayments, if you apply for a loan with an active BNPL account owing money you leave yourself in a vulnerable position. Some lenders will take half of what you owe and calculate that as an ongoing repayment which will drastically reduce your borrowing capacity. Others will average out 3 months of BNPL activity from your bank statement and account that towards your ongoing expenses."
How BNPL can impact your borrowing power
How can I use Afterpay responsibly?
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Spend within your means
Only use Afterpay for purchases you can comfortably repay from your regular income.
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Pay on time, every time
Missed repayments can trigger late fees and make it harder to keep track of what you owe.
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Prioritise your essential bills
Rent, your mortgage, credit cards and other loan repayments should always come before discretionary BNPL spending.
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Set yourself a limit
Decide how much you're comfortable using Afterpay for, and scale back if repayments start to feel like a stretch.
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Link a debit card, not a credit card
This avoids using one form of credit to repay another, which can compound debt if things go wrong.
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Avoid it for everyday expenses
If you can't cover groceries or bills from your regular income, Afterpay isn't the right tool to bridge that gap.
What are the pros and cons of using Afterpay?
Pros
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No interest on purchases
There's no interest on purchases made through Afterpay's Pay in 4, which splits your purchase into four equal, interest-free installments over six weeks. You can also avoid fees by repaying on time.
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Immediate access
Using Afterpay allows you to get goods or services straight away while paying for them over four instalments.
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Spreads out the cost
Dividing a purchase into smaller repayments can make the cost easier to manage than paying the full amount upfront.
Cons
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Potential for steep late fees
Missing a Pay in 4 repayment can result in late fees, which will be the lower of 25% of the original order value or $68 per order.
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Temptation to overspend
Smaller instalments can make purchases appear more affordable, increasing the risk of spending more than you can comfortably repay.
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Credit impact
Afterpay conducts a credit check when you open a new account and may conduct another if you request a higher spend limit, which will appear on your credit report.
