Laybuy significantly ramps up credit reporting to better protect vulnerable consumers

Leading Buy Now, Pay Later (BNPL) provider Laybuy says it will begin sharing debt and payments information with credit reference agency Experian from 1 September 2022, in a move aimed at protecting vulnerable consumers by providing other lenders with a much more comprehensive picture about an individual’s financial position.

Information Laybuy will provide to Experian includes both the amounts owed and payment status, including details on any missed and late payments. This information will be made available to other lenders when making credit decisions.

Laybuy Managing Director Gary Rohloff says Laybuy is committed to being the leader in offering responsible and transparent credit, which is why it is fitting for the company to be one of the first BNPL providers in the UK to start providing payments data to Experian.

“At Laybuy we don’t want anyone to be taking on a debt that they cannot afford, and that means making sure all lenders have a full understanding of a consumer’s financial situation when considering whether to extend them credit.

“Providing this broader range of data to Experian will mean lenders can make much more informed decisions about credit by having greater visibility on how a customer is using Laybuy, including their total level of indebtedness and whether they are making their repayments on time.

“This will significantly improve transparency and means any Laybuy customer who might be facing financial stress, or who has a history of missing payments, will be much less likely to be granted further credit that could add to their financial woes.”

Gary says the move to share data will not negatively impact a consumer’s credit score at this stage because it will be ring-fenced.

“It will, however, give consumers who make their repayments on time the ability to build up their credit history. This will make it easier for them to access appropriate credit facilities in the future without the need to take on high-interest and higher-risk debt,” says Gary.

“For this reason, the sharing of data with Experian is a win-win for consumers. Not only does it provide better protection for vulnerable consumers, but it also allows those with a limited credit history to build up their credit scores.”

Gary says today’s announcement is the latest move by Laybuy to ensure it is responsibly providing consumers with transparent and convenient credit to help make their lives easier.

“For many people, BNPL offers a safer alternative to credit cards, providing them with short-term interest-free credit and a structured repayment cycle. But it is important to remember that it is still credit. That is why we have credit checked every new customer since we launched in the UK in 2019, which helps inform the setting of a responsible credit limit and sees about one-in-four applicants declined an account. Today’s announcement sees Laybuy providing even more comprehensive and continuous data about our customers’ financial position so that all lenders can make more informed and balanced credit decisions.

“We have taken this step because we believe it is the right thing to do. No one should be put into a position where they are offered debt that they cannot afford. This will go some way to stopping this occurring in the future and we encourage all other providers to follow our lead.”