You’re at the checkout, your cart is full, and that little “Pay in 4” button is calling your name. Go on, you’ve done it before. We all have. But here’s the question more and more Australians are starting to ask: does Afterpay affect your credit score?

The short answer? It can. And thanks to some big regulatory changes that kicked in mid-2025, the rules of the game have shifted significantly. Let’s break it down.

What Is Afterpay?

If you’ve somehow avoided Afterpay until now, here’s the deal: it’s a Buy Now Pay Later (BNPL) service that lets you split a purchase into four equal fortnightly payments, interest-free. Zip Pay, Klarna, Humm, and PayPal Pay Later work on a similar model.

It’s frictionless, it’s fast, and it feels a lot less scary than whipping out a credit card. Which is exactly why 43% of Australian adults used a BNPL service in the past six months, with Afterpay leading the charge with over 3.5 million active Aussie customers.

But “interest-free” doesn’t mean “consequence-free.”

The Big Rule Change: June 2025

For years, BNPL sat in a bit of a regulatory grey zone. It wasn’t technically treated like a credit card or a loan, so it largely flew under the radar of your credit file.

That changed on 10 June 2025, when the Australian Government’s Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 came into full effect. Under these new rules, BNPL providers, including Afterpay, Zip, Klarna, Humm, and PayPal Pay Later, are now regulated under the National Consumer Credit Protection Act (NCCP), just like traditional lenders.

What does that mean in practice? Afterpay now has to:

• Hold a licence from ASIC
• Comply with responsible lending obligations
• Conduct credit checks for new accounts and spending limit increases
• Report certain account activity to credit bureaus

In short: Afterpay is now treated much more like a credit card in the eyes of lenders. And your credit score is paying attention.

How Does Afterpay Affect Your Credit Score?

There are three main ways BNPL can now show up on your credit file:

1. Credit Enquiries

When you sign up for a new Afterpay account or request a higher spending limit, Afterpay now conducts a credit check and reports this to illion, one of Australia’s major credit bureaus. These show up as enquiries on your credit file.

One or two enquiries? Not a big deal. A string of BNPL sign-ups over a short period? That starts to look a little concerning to lenders, like you’re suddenly very hungry for credit.

2. BNPL Missed Payments

This is the big one. If you miss payments and your account goes into arrears, Afterpay can report that negative activity to credit reporting agencies. And unlike a gentle reminder from a friend, a missed payment on your credit file can linger for up to five years.

3. Good Behaviour Isn’t Always Rewarded

Here’s the kicker: while negative activity can hurt your score, paying on time doesn’t automatically boost it. At least not yet. The system hasn’t fully caught up to rewarding good BNPL behaviour the same way it does for credit cards. Think of it like being a model employee but not getting a performance review. You’re doing the right thing, but it might not be showing up on the scoreboard.

What About Other BNPL Services?

Afterpay isn’t alone here. All major BNPL providers are now subject to the same regulations. So whether you’re using Zip Pay, Klarna, Humm, or PayPal Pay Later, the same principles apply:

• Sign-ups may trigger credit enquiries
• Missed payments can be reported
• Multiple BNPL accounts add up in the eyes of lenders

The more BNPL services you juggle, the more complex your financial picture becomes, and the harder it can be for lenders to assess your true repayment capacity.

Why Does This Matter?

If you’re thinking about applying for a home loan, a car loan, or any other significant credit product in the next 12–24 months, your credit file matters more than you might realise.

Lenders don’t just look at your income. They look at your credit history, your existing liabilities, and your repayment behaviour. A BNPL account, especially one with missed payments or multiple enquiries, can raise a red flag, even if you’ve never missed a mortgage repayment in your life.

This is exactly the kind of thing our team at HPartners helps clients navigate. If you’re planning to buy a home, it’s worth getting your financial ducks in a row well before you start house hunting.

So, Should You Delete Your Afterpay Account?

Not necessarily. BNPL isn’t evil – it’s a tool. Like any financial tool, it can be used well or poorly. Here’s how to stay on the right side of your credit score:

✅ Do:

• Pay on time, every time — set reminders if you need to
• Limit the number of active BNPL accounts you hold
• Check your credit file regularly (you can get a free copy via Equifax, Experian, or illion)
• Use BNPL for things you could actually afford to buy upfront

❌ Don’t:

• Sign up for multiple BNPL services in a short period
• Use BNPL to fund spending that stretches your budget
• Ignore late payment notifications (those fees add up fast, and so does the credit damage)

The Bigger Picture: Know Where You Stand

The BNPL landscape in Australia has changed significantly, and staying informed is the best thing you can do for your financial health. The good news is research from Afterpay and Experian actually found that the average Afterpay customer has a credit score of 743 – pretty solid, and not far off the average credit card applicant. So BNPL users aren’t necessarily in financial trouble; they just need to be aware of the new rules.

If you’re feeling a little uncertain about how your spending habits might be affecting your broader financial picture, whether it’s BNPL, credit cards, or just life getting expensive, it might be time for a chat.

At HPartners, we help everyday Australians understand their money and make smarter decisions at every stage of life.

Ready to Get Your Finances on Track?

Whether you’re saving for a home, planning for retirement, or just want to make sure your financial habits are working for you, our team is here to help.

Book a free discovery call with HPartners today – because your financial future is worth more than four easy instalments.

Any advice is general in nature only and has been prepared without considering your needs, objectives or financial situation. Before acting on it, you should consider its appropriateness for you, having regard to those factors. Before making any decision about whether to acquire a financial product, you should obtain the Product Disclosure Statement.