Does Klarna Affect Credit Score?

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Sunny Avenue
Credit Scoring Sunny Avenue
31 May 2024

In the world of online shopping, buy now, pay later (BNPL) services like Klarna have become increasingly popular.

But as you consider using these convenient payment options, you might wonder, "Does Klarna affect credit score?" 

I discuss how Klarna impacts your credit score, as well as answer the question, "Does getting declined on Klarna affect credit score?"

Read on to learn about the potential implications of using Klarna on your creditworthiness.

Key Takeaways

  • Using Klarna responsibly can positively impact your credit score by demonstrating responsible credit management.
  • Missed payments and financing options requiring hard credit checks can negatively affect your credit score.
  • Starting from June 1, 2022, Klarna reports BNPL and financing payments to major credit reference agencies.
  • Explore alternatives like credit cards and loans to build credit and maintain a healthy credit score.

Does Klarna Affect Your Credit Score?

Using Klarna can affect your credit score. Consistent on-time payments have a positive effect, showing responsible credit management. However, missed or late payments, along with financing options requiring a hard credit check, can harm your score.

Budgeting and affordability are crucial to avoid negative credit score effects.

When I checked my credit report after using Klarna, I did find a mention of Klarna on the report. Klarna's presence was listed as an account entry, showing that I had used their services for my purchases.

The credit report included information like when I opened the Klarna account, the credit limit or available credit provided by Klarna, and my payment history related to that account.

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Klarna and BNPL Services

Klarna, a Stockholm-based company founded in 2005, is one of the most well-known BNPL service providers.

It allows customers to make purchases from partnered retailers and pay for them later, either in full within 30 days or through smaller installments over a longer period.

Other BNPL providers include Clearpay, Laybuy, and Zilch.

These services offer flexibility in managing personal finances and have gained popularity, particularly among younger generations.

How Klarna's Payment Options Work

Klarna offers various payment options, including:

Buy Now Pay Later

Pay in full within 30 days, with no interest charged.

Pay in 3

Divide the cost of a purchase into three equal installments, with the first payment due at the time of purchase and the subsequent payments due every 30 days. No interest is charged.


Pay for a purchase over 6 to 36 months, with interest rates and repayment terms determined by an individual agreement with Klarna.

These payment options provide customers with the flexibility to manage their cash flow and make purchases without incurring interest charges if managed responsibly.

Klarna and Credit Checks

Klarna performs credit checks on customers to assess their financial standing and determine their eligibility for its payment options.

The type of credit check depends on the chosen payment option:

Soft credit check

Conducted for Buy Now Pay Later and Pay in 3 options. Soft checks do not affect your credit score and are not visible to other lenders on your credit report.

Hard credit check

Conducted for Financing options. Hard checks are visible on your credit report and can potentially affect your credit score.

Credit checks are carried out by credit reference agencies, such as TransUnion and Experian. If you have questions about your credit score or the data provided during a credit check, contact the credit reference agencies directly.

Do You Need a Good Credit Score for Klarna?

Klarna does not have a minimum credit score requirement for its pay-in-3, financing or, buy now pay later financing options.

If you're new to the UK and building your credit score be careful with klarna as if you are approved and miss payments it can set you back in your journey to obtaining a good credit score.

The Impact of Klarna on Your Credit Score

Using Klarna can affect your credit score, depending on how you manage your account and repayments. Here's what you need to know:

Positive impact

If you consistently make on-time payments using Klarna, it can have a positive effect on your credit score. This demonstrates to lenders that you can responsibly manage credit.

Negative impact

Missed or late payments, as well as using financing options that require a hard credit check, can negatively affect your credit score. These factors can hinder your ability to obtain new credit cards, loans, or mortgages in the future.

It is essential to budget and ensure that you can afford any repayments when using Klarna to avoid negatively impacting your credit score.

The Consequences of Missed Payments

If you fail to make timely repayments on your Klarna account, it can have severe consequences for your credit score and overall financial well-being. Missed payments can lead to:

  • Negative marks on your credit report, which can lower your credit score
  • Increased difficulty in obtaining credit in the future
  • Potential involvement of debt collection agencies to recover outstanding balances
  • Increased fees and charges associated with late payments

To prevent these consequences, it is crucial to manage your Klarna account responsibly and ensure you can meet all repayment obligations.

Klarna's Reporting to Credit Reference Agencies

Starting from June 1, 2022, Klarna reports all BNPL and financing payments to major credit reference agencies, such as Experian and TransUnion. This means that your payment history with Klarna will be visible to other lenders, affecting your credit score.

By reporting this information, Klarna aims to promote responsible lending and help its customers build a positive credit profile without relying solely on credit cards. However, it is essential to remember that not all BNPL providers follow the same reporting practices.

Using a BNPL service that does not report to credit agencies may not positively impact your credit score and could negatively affect it if you miss payments.

Using Klarna Responsibly

To minimise the risk of negatively affecting your credit score, follow these tips when using Klarna:

  • Only use Klarna for purchases you can afford and have budgeted for
  • Make all required payments on time and in full
  • Monitor your credit report regularly to ensure the accuracy of the information reported by Klarna

By using Klarna responsibly, you can maintain a healthy credit score and demonstrate your ability to manage credit to potential lenders.

Alternatives to Klarna for Building Credit

If your goal is to build your credit score, there are other, more effective ways to do so. Consider the following alternatives:

Credit cards

Obtain a credit card from a reputable bank and make responsible, timely repayments. This can help build a positive credit history over time.


Take out a small loan and repay it on time and in full. This demonstrates your ability to manage debt responsibly.

Electoral roll

Ensure that you are registered on the electoral roll, as this can positively impact your credit score.

By exploring these alternatives and using credit responsibly, you can work towards building a strong credit score.

Does Getting Declined on Klarna Affect Credit Score?

Being declined on Klarna will not directly impact your credit score. However, if you applied for a financing option that requires a hard credit check, the hard searches on your credit report could potentially affect your credit score.

Keep in mind that multiple hard searches within a short period may signal to lenders that you are experiencing financial difficulties, which could negatively impact your creditworthiness.

Do Mortgage Lenders consider Klarna in Affordability Checks?

Yes, there is a possibility that mortgage lenders might include your monthly Buy Now Pay Later commitments as part of their affordability checks.

It's crucial to be aware of this potential factor and manage your credit responsibly to ensure a smooth mortgage application process. Klarna themselves have confirmed this to be the case for buy now pay later. 

Where Can I Check My Credit Score?

If you're unsure where to check your credit score, it's a good idea to review your multi-agency credit report, if you're unsure where to start, review your: Credit Scoring options.

Does Extending Due Date on Klarna affect Credit Score?

Opting for a payment holiday with Klarna's Buy Now Pay Later or Financing options can harm your credit score. While Klarna allows you to pause an order for 30 days (or 60 days with Financing), this arrangement is reported to Credit Reference Agencies, negatively impacting your credit rating.

Such reporting suggests to lenders that you have altered repayment terms, potentially leading to difficulties in obtaining credit or less favorable borrowing terms in the future.

For example, let's say you decide to use Klarna's Buy Now Pay Later option and request a payment holiday for 30 days on a recent purchase. While it may provide temporary relief from making payments, this arrangement will be reported to Credit Reference Agencies.

As a result, your credit score could be negatively affected. 

CheckMyFile - Get a Free Copy Of Your Credit Report

★★★★★ 4.8

If you're worried about your credit score, it's a good idea to regularly monitor it to look for any credit you don't recognise. This can often be a sign of Credit Fraud.
You can view your credit report with CheckMyFile. CheckMyFile offer a 30-day free trial to view your report. If you just need a quick look to make sure all is in order, checkmyfile is a great (free) way to do it. 

Try it FREE for 30 days, then £14.99 a month - cancel online anytime

Does Using Klarna Affect Your Credit Score?

In summary, to answer the question, does klarna affect credit score? It does affect your credit score, either positively or negatively, depending on how you manage your account and make repayments.

By understanding the potential implications of using Klarna and other BNPL services, you can make informed decisions about your credit usage and work towards maintaining a healthy credit score.

Remember to always use credit responsibly and consider alternative methods for building credit, such as credit cards and loans, to demonstrate your creditworthiness to potential lenders.


Stuart is an expert in Property, Money, Banking & Finance, having worked in retail and investment banking for 10+ years before founding Sunny Avenue. Stuart has spent his career studying finance. He holds qualifications in financial studies, mortgage advice & practice, banking operations, dealing & financial markets, derivatives, securities & investments.

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