Anna Maria Andriotis
speaker
3,396 appearances
52 recordings
1 series
first heard Jul 2017
last heard Dec 2022
Anna Maria Andriotis’s voice in public audio — every appearance, attributed to the second.
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WSJ Your Money Briefing · Why ‘Buy Now, Pay Later’ Data Isn’t in Your Credit Report · 21 Oct 2022
podcast
So you have the speed at which these plans are paid off being very quick, and the fact that people who use these plans tend to apply for them very often.
And those two things can result in people's scores falling, even if they're paying these payment plans on time.
One interesting thing that I found in working on this story, one major credit reporting firm ran a test, basically kind of like a simulation, ran a test of more than 130 million by now pay later loans and short-term payment plans, these pay in four plans that we're talking about.
And what was found was
was that some 57% of consumers who would have these accounts on their credit reports would experience a, quote, material, end quote, credit score decrease that could persist for over a year despite paying the account on time.
I think that is one of the most clear-cut indicators that I've seen that the consumer credit sector in the US is just not ready for these accounts to be added into credit scores.
One of the issues here with this information not being reflected in credit reports is that there's a lot of people handling these pay-in-for payment plans very responsibly, paying them on time.
If this history of paying on time was to be added on credit reports, that would likely increase their chances.
of being able to get approved for other loans or for credit cards or for credit cards with bigger credit limits, with bigger spending limits.
So people who are handling these loans, these payment plans well, paying them off on time, are being penalized by not having them reflected on credit reports because that's positive payment behavior that as consumers you'd want lenders to know about and to be able to see.
when they're reviewing your application for a mortgage, for an auto loan, credit card, etc.
The Consumer Financial Protection Bureau has been pushing both the credit reporting firms, the buy now, pay later companies as well, to get these accounts added on to credit reports in a consistent way across the board with three major credit reporting firms.
But the concerns right now exist on both sides of the aisle, quite frankly, here.
Last year at this time, there was a good amount of finger pointing between the two sides where
The credit reporting firms were looking at the buy now, pay later companies in a somewhat sort of suspicious way, like, well, why aren't you reporting your payment plan?
That's not normal.
The Buy Now, Pay Later companies were looking at the credit reporting companies saying, well, these payment plans are different.
You need to come up with a way of us to report this data in a way that is representative of the different type of structure that these payment plans have.
Some consumers that have been signing up for these plans
have had a harder time keeping up with these bills, are falling behind.
Showing 81–100 of 3,396 · page 5 of 170
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