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Can BNPL Hurt Your CIBIL in 2025? Here’s the Truth

Leave a Comment / By admin / December 5, 2025

Can BNPL Affect Your CIBIL Score in 2025? The Fact Behind Fiction by

The ‘Buy Now Pay Later’ market in India is growing rapidly and has, over the past few years, become one of the most preferred payment options among young earners, first-time credit users, and online shoppers. BNPL gives the comfort of buying a product instantly and paying later in flexible instalments, often without interest. What seemed like a simple convenience has now grown into a major factor in your credit profile. As we enter 2025, the biggest concern of borrowers pertains to whether BNPL can hurt their CIBIL score and how it will eventually affect future personal loan approvals.

The truth is simple: BNPL can help or harm your CIBIL score, depending entirely on how responsibly you use it. Most BNPL companies have started reporting customer repayment behaviour directly to credit bureaus since 2024, making BNPL activity part of your formal credit history. Quite simply, your usage of BNPL is now treated just like any small unsecured loan. Every payment on time strengthens your score, every missed due date reduces it.

Understanding this shift will be important for anyone planning to apply for a personal loan, credit card, car loan, or home loan. Many borrowers damage their credit score unknowingly through small mistakes such as late BNPL payments, high utilisation of BNPL limits, and maintenance of multiple BNPL accounts. In a time when lenders heavily use CIBIL to approve personal loans, BNPL behaviour will decide whether your loan is approved quickly, gets delayed, or is rejected.

In this blog, we detail exactly how BNPL impacts your CIBIL score in 2025, how BNPL activity is looked at by lenders when evaluating personal loans, and how one can safely use BNPL without hurting their future financial options.

How BNPL Works in 2025 and Why It Affects CIBIL

BNPL was initially considered a simple convenience feature. Most users believed that it did not constitute a loan, and hence, did not show up in your credit report. This used to be true a few years ago, but that is no longer the case as regulations have changed. The Reserve Bank of India has tightened the norms for digital lending and now requires BNPL companies to be far more transparent. This means almost all leading BNPL players do report your repayment data to credit bureaus.

When you use BNPL, the company essentially extends a short-term unsecured credit line for you. It may not feel like a loan, but from the perspective of the lender, it is a form of borrowing. Every BNPL transaction counts as credit usage, and every repayment counts as credit behavior. That is why BNPL today directly influences your CIBIL score.

If you are careless with repayments, even a small late payment of a few hundred rupees can reduce your credit score. The reason is simple: credit bureaus consider your repayment discipline to be one of the most important factors when calculating your score. If your BNPL dues show delays, the bureaus assume that you may also delay future loan payments, making you a riskier borrower.

Can BNPL hurt your CIBIL score? Yes, if mismanaged.

BNPL is not bad in itself. The trouble starts when borrowers treat BNPL as free credit and don’t handle it with caution. There are various BNPL habits that can lower your CIBIL score in 2025.

Delays in repayments are the most harmful. Even a slight delay emits negative signals to lenders. One missed due date can shrink your score considerably, especially if you already have a thin credit profile. The second major cause for concern is high BNPL usage. Using your BNPL limit too much propagates dependence on short-term credit. When lenders consider your application for a personal loan, they look at how dependent you seem to be on BNPL, and this may raise a red flag regarding your ability to repay.

Another problem is maintaining multiple BNPL accounts. A large number of young borrowers use several BNPL apps at the same time, like Amazon Pay Later, Flipkart Pay Later, LazyPay, Simpl, Paytm Postpaid and others. This leads to the emergence of many micro-loans in your credit report, which lenders may understand as credit hunger or over-borrowing. If lenders conclude that you are over-reliant on small loans, your personal loan approval may be delayed or rejected.

In 2025, overusing BNPL also raises your credit utilisation ratio, directly pulling down your score. A high utilisation ratio indicates financial stress, even if the dues from BNPL are small. All these factors together show that BNPL can indeed hurt your credit score if you do not use it responsibly.

How BNPL Impacts Personal Loan Approval in 2025

Personal loan providers heavily rely on credit bureau data. In case of reviewing your CIBIL report, they notice each active as well as past BNPL account along with the repayment history, total outstanding dues, and the number of credit lines. If the BNPL record shows irregularity or overuse, the lenders may reduce your loan eligibility or increase your interest rate.

BNPL also impacts your debt-to-income ratio. Though BNPL amounts are small, multiples add up and cut your repayment capacity. Lenders check if your existing EMIs, BNPL dues, and credit card bills fit within your income. If the debt burden is high, the personal loan application may be rejected or the loan amount reduced.

In the last few years, several salaried employees with a monthly income in the range of ₹15,000 to ₹30,000 have seen their personal loan applications rejected as BNPL repayment history added risk to their credit profile. Even a single delay on a BNPL bill impacts your loan eligibility.

Advanced credit algorithms adopted by most lenders in 2025 automatically detect BNPL risks, frequent usage patterns, and payment irregularities. Based on this data, lenders classify borrowers as high-risk or low-risk; further, their categorization has a say in interest rates, loan limits, and the speed of approval. The ones with clean BNPL behavior receive faster approvals and get better interest rates. Those whose behavior is irregular have to go through a tight scrutiny.

Can BNPL improve your CIBIL score? Yes, if used responsibly

BNPL has its positives too. When used responsibly, BNPL can actually help build or improve your CIBIL score. For many first-time borrowers who have never taken a personal loan or credit card, BNPL becomes their first credit line. Timely BNPL repayments help them build a credit history, which is critical to getting future loans.

If you use BNPL in moderation and clear your dues before the deadline, credit bureaus record this as disciplined repayment behaviour. Over time, your credit score improves. A higher CIBIL score opens the avenue for getting personal loans at lower interest rates. It also increases your chances of getting pre-approved loan offers from banks and NBFCs.

The key is to treat BNPL like any other debt: keep your usage low, pay before the due date, and avoid multiple BNPL accounts. If you maintain the discipline, BNPL becomes a powerful tool of credit building rather than a risk.

Common BNPL mistakes that hurt CIBIL:

Many borrowers are hurting their credit scores by committing certain avoidable mistakes. The biggest mistake committed is ignoring small BNPL dues. There are borrowers who think that defaulting on a small payment of ₹300 or ₹500 would not matter. In reality, credit bureaus do not discriminate between small and large delays in payments. A small delay can reduce your score as much as a large one.

Paying only after receipt of a reminder is another mistake. If you wait for reminders, you will probably miss deadlines. Sometimes, reminders fail to reach due to technical issues or because of spam filters. Any delay forms part of your permanent credit record.

Many users also misunderstand BNPL and cashback or offers and begin to purchase unnecessary items. BNPL overspending does nothing but increase financial pressure and sends negative signals into your credit files. Credit bureaus study such habits of spending very closely and attribute this as a signal of poor discipline in maintaining finances.

Borrowers need to know that BNPL use is not a secret from lenders. Every little action affects your financial reputation. Good use of BNPL fosters trust, whereas bad use diminishes creditworthiness.

How to Use BNPL Without Hurting Your CIBIL Score

The simple plan to safely use BNPL in 2025 would be paying all BNPL bills on time; set reminders a week in advance from the due date, or opt for the auto-debit facility to get money deducted on time.

Keep your utilization of BNPL low. Never take BNPL on every purchase. Use it only for essential needs, not for lifestyle shopping or impulse buys. Avoid keeping multiple BNPL accounts active. If you already have several, try closing unused accounts to reduce credit clutter.

Check your CIBIL score regularly and ensure that all BNPL entries are updated correctly. In case of any wrong information, you should immediately raise a dispute with the credit bureau. This keeps your credit data clean and correct, thereby helping in getting future personal loans approved.

If you are considering taking a personal loan over the next few months, use the BNPL facility as little as possible. Lenders like borrowers whose credit behavior is stable. By reducing BNPL activity, you will be boosting your credit profile in advance of making that loan application. Final Conclusion BNPL is a convenient financial tool, but it needs to be handled responsibly. By 2025, BNPL will hurt your CIBIL score in case of misuse, while the same will build your credit score in case one uses it with discipline. It all lies in the repayment behaviour, utilisation level, and responsible credit management. If you intend to apply for a personal loan, your BNPL habits would dictate the acceptance of your application. The lender assesses each and every minute detail in the credit report to decide upon your creditworthiness. A disciplined approach will help you secure personal loans at better interest rates, higher loan amounts, and faster approval. BNPL is neither good nor bad in itself. It is an asset only when managed with wisdom. By keeping its impact on CIBIL in view and maintaining responsible usage, you may avail of the convenience provided by BNPL without compromising your financial future.

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