FICO data reveals the younger cohort is surprisingly mirroring millennial adoption of credit card products.

New credit scoring models, which lenders are not accustomed to using, may make their credit scoring costs higher in the near term.

To maintain growth, Sezzle looks to phone plan, subscriptions for stickiness.

Fintechs trying to assess BNPL and loan risk for subprime populations now have a new tool.

Affirm released a bevy of data regarding its user base and loans in a letter addressed to senators. Affirm’s data suggests a tiered system may be emerging in BNPL, where different providers are serving different slices of creditworthy customers. However, the income range of US adults seeking BNPL loans demonstrates widespread popularity of alternate credit, a key concern for issuers who risk losing credit card customers to these alternative loans. They need to address that risk with competitive, rewards-eligible card-linked installment loans.

Block will pilot a real-time credit scoring model called Cash App Score, per a press release. Users’ Cash App Scores are based on financial behaviors within the Cash App ecosystem: deposit frequency, spending habits, savings activity, and repayment history, and other metrics. Cash App’s micro loans have acted as a proof of concept for its proprietary underwriting model, which it now likely wants to expand into larger-value (and more lucrative) lending. Giving consumers a visible—and highly manipulable—score can boost loan value and overall engagement.

FICO has partnered with Plaid to incorporate cash flow data from consumers’ checking, savings, and money-market accounts into its UltraFICO Score. The updated scoring model is designed to give lenders a more comprehensive view of a customer’s creditworthiness than legacy credit files indicate. Consumers who have credit products can access more, but those who don’t are less likely to be approved. Yet in a short time, scoring has evolved to better reflect consumers’ everyday financial behaviors and their willingness and ability to pay. This should get more credit products into more consumers’ hands.

Plaid introduced a credit risk score based on real-time cash flow data as it dives further into credit scoring amid an industrywide push to monetize formerly unused or underused data sources. The fintech, a huge player in data aggregation, has diversified its business interests as aggregation has commoditized. Consumer-permissioned financial data shows promise as a new pipeline for consumer credit information. But the introduction of new forms of credit data doesn’t guarantee anything will change for consumers who struggle to access credit.

TransUnion has introduced new pricing for credit scoring for mortgage borrowers, undercutting the pricing of FICO’s new mortgage credit scoring model: FICO charges resellers $10 per score, while TransUnion charges $4. The market for consumer credit data and how it’s packaged is hotly contested, and the government has helped facilitate competition. In addition, the fintech Plaid, a newcomer to credit reporting, just introduced a cash flow–based scoring model. This competition is good for consumers, because it creates more ways for them to access credit. And it should also be good for data buyers, including banks, because it will mitigate prices and encourage the development of more sophisticated scoring models and data products.

FICO introduced a new model for pricing and licensing its score for tri-merge resellers—vendors that consolidate credit reports and provide reporting to mortgage lenders, per The Wall Street Journal. This is another shot in the protracted war between FICO and the credit bureaus. VantageScore is a credible threat to FICO’s dominance, but the bureaus will lose the markup on the FICO scores that they were distributing. In addition, margins will get squeezed as they lose the markup from resales.

10.7% of consumers with student loans were 90+ days delinquent in the last six months in April 2025, per a FICO report. Issuers should take note that 54% Gen Zers are already using credit products to navigate stress from student loan repayment, per FICO. If economic conditions worsen, credit card delinquencies could also begin to rise in tandem with student loan delinquencies.

Gen Zers care deeply about their credit scores—according to one survey, even more than their social media following. That’s because most Gen Zers believe it’s an important marker of their financial health. But Bloomberg recently reported that Gen Z’ credit scores have taken the biggest hit of any age group in 2025. As Gen Zers look to their credit scores as a measure of financial success, rapidly dropping scores may drastically alter their perceptions of their financial health. Paired with delinquencies and rising debt, many Gen Zers may be actively looking for help to turn their finances around.

The news: Buy now, pay later (BNPL) firms are exhorting the Department of Housing and Urban Development (HUD) not to write new rules about how installment loan histories would affect federal home loan eligibility. Our take: BNPL providers are divided on whether furnishing their loan information supports or hurts their espoused mission for financial inclusion and helping consumers access credit. Affirm appeared the odd one out by offering more transparency about its consumers’ financial health. However, if HUD moves ahead with new loan eligibility rules, its customers could end up the better for it, while reporting naysayers Klarna and Afterpay will have to scramble to set up their customers for success

The news: Klarna and Afterpay will not share the majority of their consumers’ loan information with credit bureaus until they can receive confirmation that their customers will not be penalized for seeking buy now, pay later (BNPL) plans. Our take: Affirm’s early plunge into credit reporting has been blunted against its competitors’ refusal to participate in the system, but it still takes the reputational lead in terms of being a “trustworthy” provider.

The finding: Up to one-third of US consumers consider lying on credit applications to be acceptable in some situations or normal behavior, potentially fueled by the rising cost of living, per FICO’s 2025 Consumer Survey. Our take: The rise of first-party fraud means FIs can no longer rely solely on self-reported data. By responsibly leveraging a broader range of data points—such as transactional history, rent/mortgage payments, and utility bill data—within compliance guidelines, banks can build a more comprehensive and accurate picture of a customer's financial health and ability to repay.

The news: New account openings were down 5% across Wells Fargo, Citi, Bank of America, and American Express during Q2 2025, per The Wall Street Journal. Our take: Issuers are going to chase opportunities to increase their payment volume, which explains targeted efforts to boost luxury travel and dining rewards. But looking long-term, banks need to think strategically about loosening their credit guidelines.

The news: FICO will release credit scores that incorporate buy now, pay later (BNPL) reporting this autumn, per a press release. Our take: Reporting BNPL data to the credit bureaus would be a solid step toward combatting BNPL’s “phantom debt” criticism.

Block demonstrates an alternative path forward to determining financial health but needs to expand beyond micro loans.

The BNPL provider is taking the lead on credit reporting as the industry waits for regulatory clarity

Their model proved they can include BNPL loans without hurting most consumers’ credit scores