At a Glance

 

• Buy Now, Pay Later (BNPL) services are increasingly common but can complicate the mortgage application process in ways borrowers might not expect.
• BNPL activity, even when not listed on a credit report, can influence mortgage underwriting by appearing on bank statements, affecting debt-to-income calculations, and prompting additional documentation.
• Borrowers can take proactive steps—such as limiting new BNPL activity and organizing account records—to help avoid delays or added scrutiny during the mortgage process.

Buy Now, Pay Later (BNPL) services—such as Affirm, Klarna, Afterpay, and PayPal Pay Later—have become an increasingly popular way for consumers to finance everyday purchases. These services allow buyers to split payments into smaller installments, often with no interest, and are commonly used for retail, travel, and online transactions. 

While these short-term installment plans may seem minor, they can introduce unexpected complexity when a borrower applies for a mortgage.

During the mortgage approval process, lenders don’t just look at credit scores—they evaluate a borrower’s full financial profile. This includes income, assets, liabilities, credit history, monthly obligations and spending patterns. Underwriters also review recent bank statements to identify recurring payments or liabilities that may not appear on a credit report. BNPL activity often falls into that category.

“BNPL is becoming more visible in underwriting systems,” said Brett Hively, Senior Vice President and Mortgage Capital Markets and Financial Strategist at Ameris Bank. “We’re seeing more cases where these accounts prompt additional documentation or affect DTI calculations.”

BNPL Activity and the Mortgage Review Process

BNPL services may not always appear on a credit report, but they can still influence how an application is reviewed. Underwriters are trained to look for patterns and obligations that could affect a borrower’s ability to repay a loan. And with BNPL usage continuing to grow—15% of consumers used BNPL in the prior year, up from 14% in 2023 and 10% in 2021, according to the Federal Reserve¹—these transactions are increasingly likely to show up on bank statements and prompt further review.
 

• Visibility on Bank Statements: BNPL payments frequently show up as recurring transactions. These entries can prompt underwriters to request documentation for each account.
• Impact on Debt-to-Income Ratio (DTI): Lenders calculate DTI by comparing monthly debt obligations to income. BNPL payments—regardless of size—can be included in that calculation, potentially affecting loan eligibility or approval amount.
• Credit Limits vs. Balances: Some lenders may consider the full credit limit of BNPL accounts—not just the current balance—when assessing a borrower’s financial obligations. This approach is similar to how revolving credit lines are evaluated.
• Multiple BNPL Providers: Having active accounts with multiple BNPL providers can increase the number of transactions appearing on bank statements, which may lead to additional documentation requests and closer scrutiny during underwriting.
• Timing Considerations: Opening new BNPL accounts during the mortgage process can trigger fresh documentation requests and impact DTI midstream. Even short-term loans can complicate underwriting.

BNPL and Credit Scores: A Developing Landscape

While BNPL activity has traditionally had limited impact on credit scores, that may begin to change. In June 2025, FICO announced it will introduce new credit score models designed to incorporate BNPL data into credit evaluations.² These models aim to provide a more complete picture of consumer behavior, especially for those with limited credit histories.

However, industry adoption of these models may take time. For now, the more immediate impact of BNPL activity in mortgage underwriting comes from how it appears on bank statements and affects DTI—not from credit score changes.

“For borrowers, BNPL services may be easy to overlook, but they can affect mortgage readiness in ways that catch applicants off guard,” Hively said. “We want borrowers to have a clear picture of how these decisions fit into their broader financial goals, so they can move forward with confidence and fewer surprises.”

Best Practices for Prospective Homebuyers Using BNPL Services

For individuals who actively use—or are considering using—BNPL services, it’s important to understand how this activity may be viewed during the mortgage process. Even small installment plans can raise flags during underwriting if they show up on bank statements or affect debt-to-income calculations.

In many ways, the guidance around BNPL mirrors long-standing advice given to mortgage applicants: avoid large purchases and opening new lines of credit prior to or during the loan process. BNPL accounts, while often smaller in scale, can still trigger documentation requests or impact eligibility if they’re active or newly opened. Below are several best practices that can help ensure BNPL usage doesn’t complicate the mortgage process.
 

• Avoid new BNPL activity before and during the mortgage process to prevent fresh obligations from impacting DTI or triggering documentation requests. 
• Organize account records in advance to streamline underwriting if documentation is needed.
• Talk to your loan officer early about any BNPL use so they can guide you through potential impacts and next steps.

By understanding how BNPL activity may be viewed during the mortgage process, borrowers can take simple steps to stay prepared, avoid surprises, and move forward with greater financial peace of mind. Thoughtful planning and early conversations with a mortgage banker can make a meaningful difference—especially when navigating newer financial tools like BNPL.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Ameris Bank does not endorse nor is affiliated with the companies listed in this article. 

¹ https://www.federalreserve.gov/publications/files/2024-report-economic-well-being-us-households-202505.pdf
² https://www.fico.com/en/newsroom/fico-unveils-groundbreaking-credit-scores-incorporate-buy-now-pay-later-data