Yes, it can. Since 10 June 2025, buy now pay later has been regulated as credit in Australia, so licensed providers can report your repayment history and missed payments to credit reporting bodies. Lenders also see the repayments on your bank statements and usually count them as a commitment, which reduces how much you can borrow.

Buy now pay later and home loans at a glance
Question Short answer
Is buy now pay later credit? Yes, regulated under the National Credit Act since 10 June 2025
Can it show on my credit report? Yes, from licensed providers, including late or missed payments
Do lenders count it? Usually, as a monthly commitment, and they read it on statements
Best move before applying Pay off and close the accounts you do not need

What changed for buy now pay later in 2025?

The Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 brought buy now pay later under the National Credit Code from 10 June 2025. Providers now need an Australian credit licence, most products are regulated as low cost credit contracts, providers must check suitability, belong to the Australian Financial Complaints Authority and consider hardship requests. ASIC published guidance on the new rules in Regulatory Guide 281.

Does buy now pay later affect your credit score?

It can. A licensed provider can report your account and repayment history to credit reporting bodies. Paying on time is recorded, but so are late and missed payments, and those weigh against you. Opening several accounts can also add enquiries to your file. The guide to your credit score for a home loan explains how lenders read a credit report.

How do lenders treat buy now pay later?

  • As a commitment. Most lenders ask about buy now pay later in the application and count the repayments, or a share of the limit, against your income.
  • As a spending signal. Frequent use on your statements can suggest a tight budget, and lenders weigh it when they review your living costs.
  • As a disclosure question. Accounts you do not mention usually appear on statements or your credit report anyway.

Policies differ between lenders, which is part of why the same applicant can get different answers.

How much can it reduce borrowing power?

If a lender counts $325 a month of buy now pay later repayments, that is $325 less for the home loan. At an assessment rate of 9% over 30 years, it would support about $40,000 of loan.

The effect of monthly buy now pay later repayments
Monthly repayments counted Home loan that amount would support at 9%, about
$100 $12,400
$325 $40,400

What do lenders look for in your bank statements?

Lenders usually review a few months of statements. They look for buy now pay later repayments, missed or dishonoured payments, regular spending that does not match your declared living costs and debts you did not list. The article on HEM and living expenses explains how the spending side is assessed.

Should you close buy now pay later before applying?

Usually, yes, a few months before. Paying the balances off and closing the accounts you do not need removes the commitment and gives the lender clean statements to read. Keep the closure confirmations in case the lender asks.

  1. List every account, including ones you rarely use.
  2. Pay off the balances.
  3. Close the accounts and keep the confirmation emails.
  4. Use a debit card for purchases until settlement.
  5. Check your credit report a few weeks later.

What about other small debts?

  • Payday and small amount loans on your statements are viewed negatively by most lenders, even when repaid on time.
  • Phone plans and utilities paid late can show on your credit report as repayment history or defaults.
  • Personal and car loans are counted at their repayments, and some lenders look at the remaining term.

Clearing small debts before you apply often lifts borrowing power more than people expect. The debt consolidation page covers rolling larger debts into a home loan.

Does an unused buy now pay later account count?

It can. Some lenders consider the available limit as well as any balance, in the same way they treat an unused credit card. Closing accounts you do not use removes the question entirely.

Is buy now pay later worse than a credit card?

Not necessarily. Lenders usually assess a credit card on its limit even when it is paid off, so an unused card can cost borrowing power too. The point is the same for both: fewer open accounts and lower limits help. The guide on how to increase borrowing power covers both.

Questions people ask

Will Afterpay or Zip stop me getting a home loan?

Not on its own. Lenders count the repayments and look at how you use it. Missed payments and heavy use are what cause problems.

Does buy now pay later show on a credit report in Australia?

It can. Since June 2025 providers need a credit licence, and licensed providers can report account and repayment information.

How long before applying should I close buy now pay later?

A few months, so your recent statements show no repayments. Keep the closure confirmations.

Charles Touma checks your credit report and statements before you apply, so buy now pay later, cards and small debts are tidied up while there is still time. A free 30-minute call covers what lenders will see. General information only, not credit advice. Sources: ASIC, Regulatory Guide 281 and media release 25-069MR on the buy now pay later reforms; Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024, checked 17 October 2026. Example figures use a 9% assessment rate over 30 years.

General information only, not credit, legal or tax advice. Your situation is assessed properly before any recommendation. Government scheme details change; figures are current at the time of writing.