Latest news with #NerdWallet
Yahoo
2 days ago
- Business
- Yahoo
Buy Now, Pay Later loans popular among Gen Z, Millennials will soon affect credit scores
FICO announced it will begin factoring in Buy Now, Pay Later loans into people's credit scores starting in the fall of 2025. Credit scores affect Americans' ability to get a loan, buy a car or home, rent an apartment, and more. FICO, the data analytics company whose credit models are used in the majority of lending decisions, said scores accounting for BNPL loans will give lenders a more comprehensive view of consumers' repayment behaviors. In a joint study simulating the inclusion of BNPL data with Affirm, FICO found score impacts were generally consistent with the opening of a new account, meaning scores improved or decreased by about 10 points for the majority of consumers. FICO offers several scoring models. NerdWallet spokesperson Sara Rathner said lenders adopting new scoring takes time and most consumers likely won't notice the change this fall. 'Different scoring models are designed for different focuses,' Rathner said. "It could be years before these are largely adopted in decision making and they might not be adopted by lenders for all types of borrowing. ' Still, FICO said the introduction of this new kind of scoring represents a significant shift, as lenders catch up with consumers' growing reliance on BNPL loans. More: What is the average credit score and how is it measured? Expert tips on how to raise yours Younger generations appear to be digital BNPL loans' most common adopters. Apps like Klarna, Affirm, and Afterpay have made securing the loans easy. In many cases, it can be done on a mobile device, often without a hard credit check, and consumers can take on many loans at once. Use of these loans among Gen Z and Millennials seems to have accelerated over the last year, with about 10% of each cohort taking advantage of them, a new Bank of America report found. This comes following a three-year period of slowing use after digital BNPL platforms saw a rise in popularity. 'For some people it's because it's convenient, but there are some who are reaching for it because they've perhaps been a bit financially stressed,' said David Tinsley, senior economist at the Bank of America Institute. For those responsibly using BNPL loans to delay payments for big purchases like a home appliance, computer, or wedding dress, the FICO change could actually improve their credit score. Rathner said credit institutions had already found ways to factor in missed or late payments into people's scores, but this change could give people more recognition for their habits of paying off loans on time. 'We're certainly seeing this acknowledgement that there are lots of different ways consumers are financially responsible,' she said. 'So it is absolutely beneficial to consumers to factor that type of behavior into decision making when evaluating them for a loan.' Tinsley said while some gravitate toward BNPL loans as a way to spread out payments knowing they'll have the cash to make them, some low-income consumers with higher rates of delinquency also use them. Of course, for consumers taking on several BNPL loans at once and not paying them off, FICO's new scoring model could be another way for lenders to clearly identify that behavior. Rathner advises consumers to read the fine print before agreeing to a BNPL loan and ensure they know how much they will need to pay at what time. 'Keep that in mind with all of your other financial obligations, especially if you're using Buy Now, Pay Later frequently and you have multiple plans going on all at once,' she said. Tinsley said consumers should remember that BNPL loans usually put them on a stricter repayment schedule than credit cards. So, while they may have an initial zero-interest grace period, they will usually also have less flexibility. If people can't make the payments on time, they can be hit with late fees and interst rates equal to or greater than those they would have faced if they made the purchase with a credit card. 'Buy now pay later can be an incredible tool,' Rathner said, if you 'enter in knowing you have the money to pay it off.' If consumers are concerned about how BNPL loans are affecting their credit score, Rathner encourages them to check their score online. Checking your own score won't make it drop. Make sure it's accurate, Rathner says. If you see an account listed you don't remember opening, that could be a sign of fraud or an error. Report it to the credit bureau and the financial institution. If you apply for a loan and are denied or unhappy with the terms offered, don't be afraid to speak up. 'Speak to the lender about the factors that went into their decision and they can help you understand whether or not there are actions you can take that would improve your odds later,' she said. If consumers believe a lender's decision was unfair and based on inaccurate information, they can file a complaint with the Consumer Financial Protection Bureau. Reach Rachel Barber at rbarber@ and follow her on X @rachelbarber_ This article originally appeared on USA TODAY: Buy now, Pay Later loans will soon affect FICO scores
USA Today
2 days ago
- Business
- USA Today
Buy Now, Pay Later loans popular among Gen Z, Millennials will soon affect credit scores
FICO announced it will begin factoring in Buy Now, Pay Later loans into people's credit scores starting in the fall of 2025. Credit scores affect Americans' ability to get a loan, buy a car or home, rent an apartment, and more. FICO, the data analytics company whose credit models are used in the majority of lending decisions, said scores accounting for BNPL loans will give lenders a more comprehensive view of consumers' repayment behaviors. In a joint study simulating the inclusion of BNPL data with Affirm, FICO found score impacts were generally consistent with the opening of a new account, meaning scores improved or decreased by about 10 points for the majority of consumers. FICO offers several scoring models. NerdWallet spokesperson Sara Rathner said lenders adopting new scoring takes time and most consumers likely won't notice the change this fall. 'Different scoring models are designed for different focuses,' Rathner said. "It could be years before these are largely adopted in decision making and they might not be adopted by lenders for all types of borrowing. ' Still, FICO said the introduction of this new kind of scoring represents a significant shift, as lenders catch up with consumers' growing reliance on BNPL loans. More: What is the average credit score and how is it measured? Expert tips on how to raise yours FICO responds to BNPL's growing popularity Younger generations appear to be digital BNPL loans' most common adopters. Apps like Klarna, Affirm, and Afterpay have made securing the loans easy. In many cases, it can be done on a mobile device, often without a hard credit check, and consumers can take on many loans at once. Use of these loans among Gen Z and Millennials seems to have accelerated over the last year, with about 10% of each cohort taking advantage of them, a new Bank of America report found. This comes following a three-year period of slowing use after digital BNPL platforms saw a rise in popularity. 'For some people it's because it's convenient, but there are some who are reaching for it because they've perhaps been a bit financially stressed,' said David Tinsley, senior economist at the Bank of America Institute. Who the change helps and hurts For those responsibly using BNPL loans to delay payments for big purchases like a home appliance, computer, or wedding dress, the FICO change could actually improve their credit score. Rathner said credit institutions had already found ways to factor in missed or late payments into people's scores, but this change could give people more recognition for their habits of paying off loans on time. 'We're certainly seeing this acknowledgement that there are lots of different ways consumers are financially responsible,' she said. 'So it is absolutely beneficial to consumers to factor that type of behavior into decision making when evaluating them for a loan.' Tinsley said while some gravitate toward BNPL loans as a way to spread out payments knowing they'll have the cash to make them, some low-income consumers with higher rates of delinquency also use them. Of course, for consumers taking on several BNPL loans at once and not paying them off, FICO's new scoring model could be another way for lenders to clearly identify that behavior. What to keep in mind if using BNPL loans Rathner advises consumers to read the fine print before agreeing to a BNPL loan and ensure they know how much they will need to pay at what time. 'Keep that in mind with all of your other financial obligations, especially if you're using Buy Now, Pay Later frequently and you have multiple plans going on all at once,' she said. Tinsley said consumers should remember that BNPL loans usually put them on a stricter repayment schedule than credit cards. So, while they may have an initial zero-interest grace period, they will usually also have less flexibility. If people can't make the payments on time, they can be hit with late fees and interst rates equal to or greater than those they would have faced if they made the purchase with a credit card. 'Buy now pay later can be an incredible tool,' Rathner said, if you 'enter in knowing you have the money to pay it off.' How will BNPL affect my credit score? If consumers are concerned about how BNPL loans are affecting their credit score, Rathner encourages them to check their score online. Checking your own score won't make it drop. Make sure it's accurate, Rathner says. If you see an account listed you don't remember opening, that could be a sign of fraud or an error. Report it to the credit bureau and the financial institution. If you apply for a loan and are denied or unhappy with the terms offered, don't be afraid to speak up. 'Speak to the lender about the factors that went into their decision and they can help you understand whether or not there are actions you can take that would improve your odds later,' she said. If consumers believe a lender's decision was unfair and based on inaccurate information, they can file a complaint with the Consumer Financial Protection Bureau. Reach Rachel Barber at rbarber@ and follow her on X @rachelbarber_
The Independent
3 days ago
- Business
- The Independent
Budget moves to make now to plan for Christmas
As Summer is in full swing and half of the year is gone, it comes as no surprise that some people are already thinking about their Christmas presents, plans and budgets. Although it may seem early, it's often believed that the earlier you begin to budget and save for big events, the less stress it is down the line. Whether it's presents for the family, a winter getaway or even hosting Christmas dinner, this year, it can be an expensive period. Personal finance expert at NerdWallet UK Amy Knight says that 'in an ideal world, we would start budgeting for Christmas on Boxing Day.' Acknowledging that most people won't do this, Knight reassures as we are only halfway through the year now, there is still a good amount of time to reset finances, look at budgets and start thinking of Christmas spending with these tips. Have a conversation 'Now is a great time for you and your family to look at budget and see what you aspire Christmas to look like this year,' Knight explains. 'A lot of people will be spending time with their loved ones at some point over the summer and sometimes it does come up in conversation about who's turn is it to host and what exactly Christmas will look like. 'You might actually find that there are other members of the family who've been secretly wanting to change things up and maybe spend a bit less so if you broach it now, you could be the person that initiates this conversation about dialling things down a little and put less pressure on.' Figure out your Christmas budget 'You need to know roughly how much you're spending, how many people you're buying for and how much per person you want to spend,' Knight says. 'Then you need to think about other Christmas costs like your festive food shop, any parties you're likely to be invited to. Then get the total and think about how you can spread that over the months that you've got until Christmas. Knight used research from NerdWallet and found that, on average, people in the UK aim to save £469 for Christmas. With about 25 weeks left until the holiday, that breaks down to saving approximately £19 per week. 'Once you have worked this amount out, then you have to review your current budget and set up an automatic payment as soon after payday as possible to go straight into a Christmas savings account,' Knight advises. Use notice accounts 'If you are somebody that already has an emergency savings pot, then you can look at higher interest rate options,' Knight says. 'We have enough time before Christmas that you can use notice accounts which pay a high rate of interest.' A notice account is a type of savings account where the bank or building society requires advance notice before you withdraw any of your money. 'For example, let's say you have got £400 to save, there's a provider called Emma with a 45-day notice pot and a 4.18% interest,' Knight says. 'If you've got £1,000 to save, then one of the best rates currently is StreamBank with a 90 day notice account – this is where you can't take the money out of there for three months but you will benefit from a 4.45% interest rate. 'If you haven't got £1,000 right now, Moneybox has got a 95-day notice account that you can start from just £1 and that will pay 4.34%. All of those interest rates are well above inflation and are going to help you build up savings faster.' Find easy ways to save 'For ideas of getting the cash you want to save together there are many ways,' Knight says. 'For example, if you sold one unused or unwanted item from your wardrobe per week on Vinted for £20 from now to Christmas, you would have £500. 'With this, you would have to withdraw it and put it into your Christmas pot to make interest however. You also have to resist the temptation of spending it on the app, but it's a way to get the money without having to make any other changes to your budgeting or lifestyle. 'Another tip is cut back on buying coffees. If you were buying a coffee for £3.50, three days a week for 25 weeks and decided to stop and save it, you would save £262.50 towards your Christmas pot,' she explains. Trade down 'Trading down for example is if you currently shop in Waitrose and you trade down to make all of your food shops from now until Christmas at Aldi or Lidl – then the savings on what you have been spending on average on your food shop can be dedicated to Christmas,' Knight says. Future-proof your finances 'Some people may find themselves in a vicious cycle where they just can't seem to break out of putting everything for Christmas on to their credit card and leaving it to January to worry about,' Knight says. 'However I would firstly ask yourself to think long and hard about is the joy of the things you've bought worth the financial pain? Is the joy worth the pain that you're going to put yourself through if you do that again and if you repeat that cycle? 'If you want to break out of it, then you need to make a plan for how you're going to pay off any borrowing that you do this Christmas. If you know you won't have additional income coming in, then the only alternative is to make some cut back elsewhere.'
CNN
5 days ago
- Business
- CNN
Americans' optimism about the economy faded as Iran tensions escalated
Consumer confidence dropped last month to a reading of 93, a 5.4 point decline from May, according to data the Conference Board released on Tuesday. Consumers had been feeling better after an agreement was secured between the United States and China to lower massive tariffs on each other — but mounting uncertainty over President Donald Trump's economic policy and tensions in the Middle East are leaving consumers feeling less gung-ho about what the US economy has in store. The drop in consumer confidence, which erased nearly half of last month's gain, is in contrast to the one-point bump that economists polled by FactSet were anticipating. The survey's cutoff date was June 18, days before the US bombed Iran, targeting its three main nuclear sites. Stephanie Guichard, senior economist overseeing global indicators at the Conference Board, noted, 'References to geopolitics and social unrest increased slightly from previous months but remained much lower on the list of topics affecting consumers' views.' Far more pertinent to consumers were tariffs, which 'were frequently associated with concerns about their negative impacts on the economy and prices,' Guichard said in a statement published Tuesday. 'As we wait to see the full impact of tariffs on prices, this uncertain sentiment could trigger reduced consumer spending,' Elizabeth Renter, senior economist at NerdWallet, said in a note Tuesday. 'After all, if you can't be sure of how big your grocery bill will be in coming months, it's difficult to budget for it.' Thus far, the impact of higher tariffs hasn't shown up in headline inflation data. However, individual items, such as electronics, have become more expensive, Federal Reserve Chair Jerome Powell noted during the central bank's post-monetary policy meeting press conference last week. More consumers noted in the survey they were putting off purchases of electronics as well as homes. But purchases for other big-ticket items like cars and appliances held strong. But the share of consumers expecting a recession over the next 12 months rose slightly last month. 'In this kind of environment, it's not surprising that consumers are hesitant to make big purchases,' Heather Long, chief economist at Navy Federal Credit Union, said in a note Tuesday. 'They are sitting on the sidelines and only buying homes, cars and appliances if they absolutely must. This is an 'abundance of caution economy.'' This story is developing and will be updated.
Time of India
21-06-2025
- Entertainment
- Time of India
Channelise your inner Shakti in these 5 divine red sarees approved by Bollywood actresses
(Image Credits: Pinterest) A vibrant red saree is often considered the epitome of elegance, beauty, and divinity in Indian culture. One of the most ideal hues for women, it reflects attractiveness as well as creates an appealing value of beauty in the realm of Shakti. In order to channelise your inner Shakti or feminine energy, carry a drape of red that enhances the overall power of your personality, making you look ethereal, pious, and divine. Seeking inspiration from our Bollywood actresses, let's take a look at 5 timeless red sarees draped by these fashion mavens. Deepika Padukone Showing up in a classic red Banarasi, Deepika left us swooning for more and looked no less than a historic painting. She draped an elegant red Banarasi with heavy gold threadwork that added the right amount of royal charm. Featuring intricately carved-out zari motifs, she further teamed it with a matching half-sleeved high neckline blouse in the same shade. The traditional yet striking avatar is a perfect pick for all the newlyweds out there. Katrina Kaif Dripping with sensational royalty from every angle, Katrina Kaif charmed us all at the wedding of Anant and Radhika Ambani. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Mortgage Rates Are Falling—Lock Yours in Today NerdWallet Learn More Undo Walking in front of the cameras in a red Sabyasachi saree with a delicate buti motif and an intricate scalloped border, the hemline featured gold floral embroidery that looked one of a kind. Keeping it sophisticated and traditional, she completed the look with a solid red, full-sleeved, high, round-neckline blouse, giving us a refreshing departure from the usual sweetheart and plunging necklines. (Image Credits: Pinterest) Shehnaaz Gill Janhvi Kapoor: 7 times Bollywood actresses aced the Punjabi suit trend Tara Sutaria Transporting us back to the Vedic ages, Tara Sutaria ditched the sleeve blouse show and gazed at the camera in a bright red Banarasi saree with intricate print detailing on the pallu and main bodice. Looking every bit gorgeous in this red Banarasi with silver floral motif detailing, she teamed it with a strapless blouse featuring a plunging neckline and brought in historic drama with a contemporary blend. Newlywed Ankita Lokhande drops a video of her 'Griha Pravesh' with hubby Vicky Jain: 'New beginning's with and family' Kajol Treating us with an oh-so-gorgeous red avatar, she decked out six yards of grace and looked absolutely bewitching. Kajol draped a plain dark red saree in sheer-net texture featuring a scalloped and sequinned hemline, with a sleeveless blouse with scoop neckline detailing. Proving that nothing can come between her love for red sarees, she completed the look with a pair of silver earrings and red bangles. Kajol just redefined weekend glamour in this structured vintage satin weave (Image Credits: Pinterest) Janhvi Kapoor Painting the town red with her ravishing red saree, she channelled her inner Shakti by complementing it with a contrasting green full-sleeved blouse. Her saree featured detailed dori and antique dabka work with delicate motifs and sequin embellishments that looked lovely with a badla lace border. Adding an extra sophistication with her green blouse made from Jeni silk. She wore this luxurious combination that cost around Rs 1.62 lakh and was picked from the selection of Torani. One step to a healthier you—join Times Health+ Yoga and feel the change
